The devil is in the detail – as George Osborne is finding out to his cost. Following the Chancellor’s 2016 Budget, delivered to the House of Commons on Wednesday, companies, financial experts and journalists have been poring over the fine print. In a damning verdict, the Institute for Fiscal Studies (IFS) warned that Britons should ‘all be worried’ about the risk of job cuts and lower wages amid growing concerns of another economic downturn. The economic think tank added that Osborne ‘won’t be able to sleep at night’ because of the likelihood of him not now meeting his pledge to balance the nation’s books by 2020.
Meanwhile, the prospect of a Tory revolt over cuts to disability benefits gathers pace. The IFS calculates that the changes would hit 370,000 people, with an average loss of £3,500 a year, leading a number of Tory MPs to write to the Chancellor asking for a rethink. The government had announced it was changing the way it calculated the daily living component of Personal Independence Payments from January 2017, while Budget documents have made clear it would save the government more than £4 billion by 2020-21.
Homeowners breathed a sigh of relief yesterday as the Bank of England kept interest rates on hold for the 84th month in a row. The unanimous vote by the monetary policy committee means that interest rates are likely to remain at historic lows for some time to come. Martin Beck, senior economic advisor to the EY ITEM Club, said: ‘The prospect of a hike in the bank rate remains one for the dim and distant future. The eurozone – the UK’s single largest source of imports – fell into deflation in February. Moreover, a backdrop of further falls in factory gate prices, subdued wage growth, and February seeing cuts in gas bills, also points to UK inflation rising very modestly this year. In addition, the Chancellor’s Budget plans imply a slightly more severe fiscal squeeze over the next five years than previously planned, which should further caution the MPC against a tighter policy.’
Figures from the Council of Mortgage Lenders will also please homebuyers. Mortgage lending leapt by 30 per cent in the 12 months to February to hit £17.6 billion after low rates and demand for homes fuelled lending. This is the highest figure in a February since 2008.
Motorists have less reason to be cheerful. New analysis from Direct Line Car Insurance reveals that drivers in England and Wales clocked up 28 million fixed penalty notices in a 10-year period for motoring offences. Many of these penalties were easily avoidable. More than two million motorists received a fine for the most basic of driver fails – not wearing a seatbelt. And new Freedom of Information data obtained by Confused.com shows that in the last year alone, nearly 17,000 motorists aged 70 or above have had their driving licence revoked or refused due to a medical condition.
If you’re planning a couple of days away this weekend, take heart from the news that rail passengers are to be given more help to claim money back when their train is delayed. The Office of Rail and Road – the regulator – has admitted that 80 per cent of passengers do not claim compensation. Now there is to be a new website, a national publicity campaign, and better staff training, to encourage claims.
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