Wesl3y @Wesl3y: "ᴜᴋ sᴘʀɪɴɢ ʙᴜᴅɢᴇᴛ ʜɪɢʜʟɪɢʜᴛs Jeremy *unt..."

United Kingdom

ᴜᴋ sᴘʀɪɴɢ ʙᴜᴅɢᴇᴛ ʜɪɢʜʟɪɢʜᴛs Jeremy *unt announced the UK's Spring budget yesterday, and there's a lot in there that will affect UK equities. Here are some highlights: • 𝗡𝗜 𝗽𝗮𝘆𝗺𝗲𝗻𝘁𝘀 𝘁𝗼 𝗯𝗲 𝗰𝘂𝘁 for individuals and the self-employed. This will free up a lot of cash for earners in the ~25 - 50k annual salary band • The 𝗶𝗻𝗰𝗼𝗺𝗲 𝗰𝗲𝗶𝗹𝗶𝗻𝗴 𝗳𝗼𝗿 𝗰𝗹𝗮𝗶𝗺𝗶𝗻𝗴 𝗰𝗵𝗶𝗹𝗱 𝗯𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝗱 which could free up more parents to enter the workforce • There will be 𝗵𝗶𝗴𝗵𝗲𝗿 𝗱𝘂𝘁𝗶𝗲𝘀 𝗳𝗼𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗮𝗻𝗱 𝗳𝗶𝗿𝘀𝘁-𝗰𝗹𝗮𝘀𝘀 𝗳𝗹𝗶𝗴𝗵𝘁𝘀 which could hurt some airlines (but probably not the budget airlines) • The 𝗵𝗶𝗴𝗵𝗲𝗿 𝗿𝗮𝘁𝗲 𝗼𝗳 𝘁𝗮𝘅 𝗼𝗻 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝘀𝗮𝗹𝗲𝘀 𝘄𝗶𝗹𝗹 𝗯𝗲 𝗿𝗲𝗱𝘂𝗰𝗲𝗱 for higher earners. This could stoke the property market (which is already on the rise again) • The (North Sea) 𝗼𝗶𝗹 𝗮𝗻𝗱 𝗴𝗮𝘀 𝘄𝗶𝗻𝗱𝗳𝗮𝗹𝗹 𝘁𝗮𝘅 𝘀𝗰𝗵𝗲𝗺𝗲 𝘄𝗶𝗹𝗹 𝗯𝗲 𝗲𝘅𝘁𝗲𝗻𝗱𝗲𝗱 to 2029 affecting profits in that sector • The creation of a £𝟱𝗸 𝗜𝗦𝗔 𝗼𝗻𝗹𝘆 𝗳𝗼𝗿 𝗨𝗞 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀. This will probably benefit the wealthy the most, but it also means that the amount of money in the UK stock market is likely to increase. The FTSE 250 along with stocks like $HL.L (Hargreaves Lansdown) rallied a little on this news. But the real benefit will take some time to materialise • 𝗕𝗶𝗹𝗹𝗶𝗼𝗻𝘀 𝗶𝗻 𝗲𝘅𝘁𝗿𝗮 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗡𝗛𝗦. It's unclear how this will play out e.g. the NHS outsource parts of its service to the US healthcare giant $HCA. Will this funding go towards UK staff salaries; private sector providers; or a bit of both? • 𝗔𝗹𝗰𝗼𝗵𝗼𝗹 𝗱𝘂𝘁𝘆 𝘄𝗶𝗹𝗹 𝗯𝗲 𝗳𝗿𝗼𝘇𝗲𝗻 until at least Feb 2025 which will benefit businesses such as pubs e.g. $JDW.L (J D Wetherspoon PLC) These changes seem good in the short- to medium-term, but the UK tax burden is still increasing in the longer term. At the same time, we got some other good news from Jeremy, OBR, and the Treasury: 1. 𝗚𝗗𝗣 𝗴𝗿𝗼𝘄𝘁𝗵 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝟮 𝘆𝗲𝗮𝗿𝘀 𝗿𝗲𝘃𝗶𝘀𝗲𝗱 𝘂𝗽 (remember when everyone was saying the UK would enter a multi-year, deep, dark recession?) 2. 𝗜𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝘁𝗼 𝗳𝗮𝗹𝗹 𝗯𝗲𝗹𝗼𝘄 𝟮% 𝗹𝗮𝘁𝗲𝗿 𝘁𝗵𝗶𝘀 𝘆𝗲𝗮𝗿. Roughly a year earlier than originally thought 3. 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗨𝗞 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘄𝗶𝗹𝗹 𝗯𝗲 𝗮𝗯𝗹𝗲 𝘁𝗼 𝘁𝗿𝗮𝗱𝗲 𝘀𝗵𝗮𝗿𝗲𝘀 𝗼𝗻 𝗻𝗲𝘄 𝗲𝘅𝗰𝗵𝗮𝗻𝗴𝗲𝘀 by the end of the year. This is likely to pump a lot of cash into an area of business with limited options This combination of information implies the 𝗕𝗮𝗻𝗸 𝗼𝗳 𝗘𝗻𝗴𝗹𝗮𝗻𝗱 𝘄𝗶𝗹𝗹 𝘀𝘁𝗮𝗿𝘁 𝗰𝘂𝘁𝘁𝗶𝗻𝗴 𝗿𝗮𝘁𝗲𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝗰𝗼𝘂𝗽𝗹𝗲 𝗼𝗳 𝗺𝗼𝗻𝘁𝗵𝘀. This will favour sectors most sensitive to rates such as real estate, banks, autos, and smaller businesses. Hopefully, this translates into some much-needed growth in the UK economy and $UK100!

4 Mentioned

HL.L

Hargreaves Lansdown

HCA

HCA Holdings Inc

JDW.L

J D Wetherspoon PLC

UK100