The 'Budget for Growth' cut its forecast for growth in 2011 down from 2.1pc to 1.7pc. The prediction for 2012 to 2014 continues to be between 2.5 and 3pc each year.
In summary taking into account all the expenses and tax reductions, if everything goes to plan, the budget will deliver a modest saving for the government. There is definitely some relief for motorists, people with capital gains over £ 3 Million and additional work placements for apprentices.
Analysing the budget, The Office for Budget Responsibility (OBR) has forecasted that unemployment will rise for the whole of the period from 2012 to 2015. So unfortunately fear of job losses continue to remain. The real earnings is also predicted to fall through 2011 and 2012 and hence there is no that much of a good news for people looking for jobs or those who are worried about their job prospects.
The budget forecasts rely a lot on the private sector creating growth and jobs while the public carries on with its job cuts and redundancies. There has been little evidence until now that this is happening and if it is then definitely a lot more is required. The corporation tax reductions by 1pc have been welcomed by the industry and will definitely help the ones that are profitable and eligible for it. But the bigger concern of businesses i.e. the government's promise to reduce the burden of regulation is yet to materialise and businesses continue to look at it with a bit of suspicion as in the past several governments promised it but failed to deliver.
In terms of impact on individuals, it is predicted that pensioners could miss out on £700 of income from the state pension and upto 40,000 workers would have to pay more national insurance and could costs families almost £ 30 Billion.
Some of the announcements by the Chancellor will definitely help, but are they enough to give the required confidence and inspire organisation to take on more people remains to be seen.
In the short term, for next few years, unless lending improves and the Bank of England does not rush to increase the base lending rate, the waters will be choppy. Kesh Thukaram commenting on the budget said, ìwe welcome the Chancellors focus on supporting small to medium enterprises as they are the back bone of the UK employment market and the focus on enterprise zones, but nevertheless, it will not be an easy ride for many companies. Redundancies in public sector and non-performing sector of the private sector will continue to rise in the near future.
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