UK’s Osborne says austerity plan is working
The UK’s Chancellor of the Exchequer George Osborne has delivered the government’s Autumn Statement saying the UK is growing faster than other economies thanks to its economic policies.
“The government’s long-term economic plan is providing a foundation for the current recovery. The UK economy has gained momentum through 2013, GDP growth has exceeded forecasts, and there are early signs that growth is balanced across the main sectors of the economy,” the statement said.
According to Osborne’s (pictured) report, the factors which weighed on UK growth between 2010 and 2012 – the euro crisis, commodity price inflation and the impact of the financial crisis – are abating, but external risks remain.
“The euro area sovereign debt crisis has stabilised, though activity remains subdued. Growth in emerging markets has disappointed in 2013, and in some cases their financial and currency markets have proved sensitive to the effects of US monetary policy,” the Chancellor also said in his statement.
As part of its Autumn announcements, the Chancellor also confirmed the government’s plans to rise the pension age to 68 from the mid-2030’s. Tony Stenning, head of UK Retail at BlackRock took the chance to remind Britons the importance of saving for their retirement: “We all know we’re living longer and today the Chancellor confirmed that we are also going to be working longer.
“BlackRock recently found that nearly half (49%) of 25-34 year old Brits are concerned they’ll outlive their savings in retirement and while they may be dismayed by today’s news, this age group has an opportunity to use their longer working life to save a comfortable nest egg for older age.
“It is vital that people are educated on the importance of saving regularly and as early as possible in their working life. We need to build a savings culture which helps people to plan ahead for their retirement – they need to build what they need tomorrow, but can’t wait until tomorrow to begin.”
Chancellor Osborne also announced a capital gains tax charge on UK residential property taxation.
David Bell, senior wealth planner, Lombard Odier, commented: “From April 2015, a capital gains tax charge will be introduced on future gains made by non-residents selling UK residential property. A consultation on how best to introduce this will be published in early 2014.
“This change brings the UK into line with other countries that tax capital gains on residential property, regardless of where the owner lives. The impact will be limited for residents of higher-tax economies, who’ll be credited (under double tax treaties) for any UK capital gains tax paid.
The biggest impact will be felt by those in low-tax economies who own homes directly, which they occupy for less than six months a year (i.e. they are non-resident).”
Click here to see full statement.