Does the end of austerity equal the start of another recession?

The UK outlook this week

With the announcement that the ‘era of austerity has finally come to an end’ - you could be forgiven for cheering.

Businesses around the country are suffering from the pre-Brexit economic jitters. From the retailers to heavy industry, employers are gearing up for a disastrous ‘no-deal’. This budget has been promised to alleviate worries, and to put strong contingencies in place for a worst case scenario.

With the economy, human migration and climate change all being key issues on the government’s agenda, you would imagine they would feature highly in any budget. To quickly recap, notable points on the budget were: an extra £500m for no-deal Brexit preparations (£4.2bn is set aside for Brexit overall), £20bn for the NHS and a new Digital Services tax.

The budget was designed for ‘the strivers, the grafters and the carers’, but is this budget really reflective of the country’s needs? With no mention of climate change, and the general posturing that accompanies any governmental budget, how can we really say this addresses KEY issues? And if so, are we prepared for a no-deal Brexit?

I suppose this depends entirely on who you ask…

Has the Government finally found its way?

It has been widely publicised that the UK Government has been struggling with party cohesion, and strategic direction in Brexit negotiations. With the departure of the Foreign Secretary over the direction of Brexit, signs of party fracture are well publicised.

One negative aspect of the Conservatives legacy will be their austerity policies. This has been a universally unpopular policy, it’s ‘scrapping’ will be met with cheers from across the UK.

Scrapping austerity, bringing some serious negotiating power to EU Brexit discussions is all in a day’s work for the UK’s Government. Proper funding of the NHS and all the hopes and dreams of millions of ‘grafters’ will be met within the coming weeks!

Apologies if my sceptiscim is hard to detect!

The opponents to the Government have been very vocal in their opposition to the above (naturally!). The labour Party were very critical, with additional support from the SNP, Lib Dems and trade unions, citing: cuts to budgets, fobbing off of workers, and that we are ‘wholly unprepared’ for Brexit.

Worrying comments indeed, but where are the budgets proponents?

The CBI’s director stated that this was a rock-solid budget, which is a big endorsement from an important entity in the business world. Others cited the benefits of freezing taxes on alcohol, in addition to dedicated funds for apprenticeships and increases to the National Living Wage.

However, the amount of negative comments still far outweigh the positive.

The current Government is now in uncharted territory, and there looks to be a very limited number of ways they can come out of this unscathed. This budget is foreshadowing for the kind of response they will meet as we pull out of the EU.

Looking forward: what are the big questions?

It isn’t fun for anybody dwelling on the potential pitfalls. There has been talk of a possible recession due to Brexit. The future of many huge UK based employers has been thrown into question, and constant negative speculation has pushed down the spending power of the GBP. Globally, our politicians are seen as weak and divided.

The key thing to remember is actually, nobody actually knows what is going to happen!

The future is still ours to take, and the businesses that succeed will be the businesses that adapt. All we can do is to plan, monitor and strategise to succeed in our chosen industries.

Unfortunately, there has been no mention as to whether our bananas will return to their curved shape or not.