Commentary: Spring Statement 2023

Commenting on today’s Spring Statement, William Marshall, Chief Investment Officer – Hymans Robertson Investment Services (HRIS) says:

“The overall message from the Chancellor was more optimistic than the November Autumn Statement. Less forecast borrowing alongside a stronger, albeit still weak, growth forecast from the OBR will provide some relief to the Government.

Gilt prices were already up and the stock market down on the day but, little changed after the budget statement indicating investors are focusing more on the ongoing banking concerns from the recent collapse of SVB.

The freezing of the Energy Price Guarantee should mean shorter-term inflation will fall faster than was previously assumed.

“The Bank of England (BoE) will have a keen interest on the success of the Chancellor’s efforts to increase the workforce, by enticing people back into work with measure like the abolition of the Lifetime Allowance (LTA) and increasing childcare support. A tight labour market is the key concern for the BoE as it has the potential to keep wages and therefore prices high. Any loosening of the labour market could give the confirmation the BoE need that their task of rising interest rates to manage inflation is almost over. 

“From an Adviser perspective, the abolition of LTA, as well as the increase in annual allowance, are likely to be of notable interest as investors previously impacted by these allowances look to revisit their pension arrangements.”