Citywire for Financial Professionals
Stay connected:

View the article online at

Autumn Statement 2012: what to expect

Chancellor George Osborne will deliver his Autumn Statement at 12.30pm today, against a bleak economic backdrop. Here's a round-up of tips from the morning's papers about what to expect.

Autumn Statement 2012: what to expect

Chancellor George Osborne will admit in today’s Autumn Statement that his austerity drive is likely to continue until 2018, as his hopes of ending public spending cuts by the 2015 election are dashed, according to reports.

Osborne is expected to concede that he will fail to meet his target of the national debt falling as a percentage of national income by 2015/16.

The Office for Budget Responsibility (OBR) will add to the bleakness of the economic picture surrounding the Autumn Statement by revising down the growth forecast for 2012 down from the 0.8% figure quoted in the Budget to close to zero. Expectations for 2013 growth will also be revised down, from 2% to closer to 1%. The OBR is also expected to push up its inflation forecast for 2013 to 2.5%, although in a rare bit of positive economic news, will lower its forecasts for unemployment next year from a peak of 8.6% to 8.4%, according to The Times.

Faced with that backdrop, Osborne will unveil a fresh round of cuts that, according to the Financial Times, he hopes will position him as the friend of Middle Britain, by targeting the jobless and the rich.

The Times has reported that another raid on banks will feature. Had the banking tax, which stands at 0.105% of bank balance sheets, stayed the same, revenues to the Treasury would have fallen.

Osborne will also seek to portray a widely-trailed cut in the pensions annual allowance, from £50,000 to £40,000 or even £30,000, in the same light, according to the FT. It said his team are arguing pensions tax relief is heavily skewed towards the richest.

Liberal Democrat plans for a mansion tax are unlikely to feature, having met with resistance from prime minister David Cameron, although an increase in stamp duty on high value properties may.

The squeeze on the rich will also be reflected in the statement’s expected focus on countering tax avoidance.

More details on the general anti abuse rule are likely, and the chancellor will announce a £10 billion drive against tax avoidance, focused largely on multinational companies, according to The Times. The FT said this crackdown could focus on public contractors.

The Times is also predicting Osborne will also try to close a loophole allowing people holding expensive properties in offshore companies to avoid stamp duty, inheritance tax and capital against tax. On inheritance tax, simplification of the payment on discretionary trusts could also feature.

Osborne is also expected to cut working-age benefits in real terms, breaking the traditional link with inflation. Of the few tipped announcements that buck the trend of clampdowns and cuts, the chancellor is anticipated to freeze the 3p-a-litre increase in fuel duty planned for January.

2 comments so far. Why not have your say?


Dec 05, 2012 at 10:57

All I want to say is

and yet the £10 Billion annually (of effectively borrowed money) is spent on 'overseas aid'

Why should tax payers continue to fund this gross stupidity so that Cameron can pretend he's 'mother Theresa'

Abolish the holier than thou ring fencing of overseas aid and save the hard pressed British tax payers £10 Billion a year, some of which could be spent on creating permanent jobs for British youngsters, in my opinion more deserving of help than some dictator in Africa

report this

Anthony O' Grady

Dec 05, 2012 at 11:03

Johnbe, bullseye. Nothing to add!

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts

In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add to your safe senders list so we don't get junked.


The Accumulator: FTSE see-saws on trade war fears

by Michelle McGagh on Jun 22, 2018 at 14:57

Sorry, this link is not
quite ready yet