George Osborne will be forced to extend austerity well into 2018 as he presents a bleak but ‘realistic’ Autumn Statement later today. Weaker than expected economic growth means the Chancellor will be forced to renege on his deficit target. Instead, he has chosen to invest £5 billion in capital projects to give the ailing economy a much needed shot in the arm. The Treasury will also announce a fifth tax increase on banks’ balance sheets, setting up a likely battle with the City as lenders accuse the Chancellor of hypocrisy.
ONS figures released yesterday reveal the recession has cut families spending power by 10%. The average home had almost £50 less to spend last year than it did in 2006. Family expenditure has now fallen 5 years in a row: the biggest, most sustained hammer blow to family finances since records began in the 1950s. The biggest rise in costs was for cars, car insurance, maintenance and fuel.
Recruitment and employment
London’s workforce is now bigger than it was before the recession, new figures from the City of London Corporation and Oxford Economics have shown. Despite a raft of recent banking cuts, the recovery has been driven by a 3.2 per cent, year-on-year growth in City of London jobs to 397,900. The number of people working in professional services has risen by 7.2 per cent to 99,200, with financial services roles climbing 1.8 per cent to 158,600.
In property news, the Chancellor plans to use today’s Autumn Statement to announce a clampdown on tax-avoidance by overseas businesses buying prime property in the UK. This could include a proposed annual charge of between £15,000 and £140,000 and the introduction of capital gains tax of up to 28%.