Chancellor takes final chance for pre-election giveaway

This week has been all about politics. The US presidential primary season ended as Nikki Haley withdrew from the Republican contest. With no official challenger to Joe Biden among the Democrats, it is now a two horse race between Biden and Donald Trump to the election in November. Meanwhile, China’s biggest annual political event, the National People’s Congress, also concluded this week. The congress brought confirmation that China’s target for annual GDP growth will remain at 5%. However, there were no new policies designed to meet the ambitious growth target.

In the UK, Jeremy Hunt used the budget for a few pre-election sweeteners. Under pressure from backbenchers to come up with a tax cut or two, the chancellor opted for another cut to national insurance. Not only can be it be presented as pro-growth and rewarding work, it is also cheaper than cutting income tax. The government will be relieved that the economic outlook has improved slightly but all in all it was a low key budget. There was nothing to move markets and the government will need more than a small NI cut or 0.1% increase in GDP to turn its fortunes around.

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• UK: Markets steady as Government increases borrowing to fund tax cuts
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