Mini Budget is expected on Friday 23 September – Actuarial Post

 Tax cuts will help us all in the immediate future, cutting our outgoings during a time of runaway inflation. It is being done in the belief that this will then help people spend more and companies invest more, both of which would support growth. However, this comes at a cost, and there’s the risk it could end up damaging our financial resilience over the longer term.
 There’s also the question of whether there will be enough in this announcement to support those on the lowest incomes, or to help us build our long-term financial resilience.
 Long term questions: In many cases this will benefit higher earners more than lower earners, because they pay more National Insurance on higher earnings and more VAT on bigger spending budgets. And while every household will be grateful for any additional help, by fuelling more spending, this could push prices up for longer, denting our longer-term financial resilience. This, in turn could persuade the Bank of England to raise rates, which makes life even harder for those with variable rate debts.
 4 policies that would help build resilience
 That’s not to say such measures won’t be welcomed by sectors across the board. The hospitality and leisure industry in particular has been crying out for immediate action as higher energy costs, combined with consumers tightening their belts, hit hard. There is speculation a 10% headline VAT rate for the sector could be introduced and potentially a business rate holiday. This would certainly act as a sticking plaster to stem business failures.
 On a wider scale, there are some expectations that the headline VAT rate will reduce from 20% to 15% and 5.5 million smaller businesses may benefit from an additional cut. It is also thought that there may be a freeze on overall business rates ahead of a larger scale overhaul, but this has been promised for some time, with proposals repeatedly shelved, so any new announcement of a ‘plan’ is likely to receive a lukewarm reception.
 Offering more firepower to financial services to lure more international business in the post-Brexit era is forecast to feature highly in Kwarteng’s speech given how crucial the sector is in powering the dominant services side of the economy. Any proposals on removing the cap on bankers’ bonuses, though, is a highly sensitive topic, given the industrial strife ripping through the public sector in particular, so this is one measure steeped in speculation which may well be kicked into the long grass.’’
 There was an initial big sigh of relief among company bosses that finally a balm would be available to limit the impact of scorching energy bills on their businesses. But there has been a woeful lack of detail on the plan and there are concerns that the support will only be temporary, given that it will be reviewed after six months. Many businesses are still in the dark about how they will survive a pretty bleak winter ahead, with energy bills quadrupling in some cases, amid worries that consumer spending is seizing up.
 Providing more detail and a longer timescale on the support window will mean businesses can plan operations with more certainty instead of lurching precariously from month to month.’’ 
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