Wednesday April 22, 02:07 PM
INSTANT VIEW 7-Darling presents budget to UK parliament
LONDON, April 22 (Reuters) - Below are reactions to British finance minister Alistair Darling's budget statement to parliament on Wednesday.
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MARKET REACTION
RUSSELL BLOOM, FOREX ANALYST, ACTION ECONOMICS
'The FX market is worried about the debt market's ability to absorb the amount of issuance for the next year. A lack of interest could see speculation of IMF aid rear its head again. I think this is the fear that is being priced into the market.'
PHYLLIS PAPADAVID, FOREX STRATEGIST, SOCGEN
'It's not positive, and we're seeing sterling weaken on the news. The fiscal slippage in the near-term is not doing sterling any favours.'
NEIL JONES, HEAD OF HEDGE FUND FOREX SALES, MIZUHO
'I would expect sterling to weaken across the board following the income tax changes. The market will consider the disincentive to effort and possible brain drain effects of possible talent moving abroad.'
CHRIS HOSSAIN, SENIOR SALES MANAGER, ODL SECURITIES
'Darling was in an unenviable position. Paint an encouraging picture and the markets don't believe him, and add to the gloom, and see markets fall away.
'The initial reaction from the (stock) market is muted -- it's encouraging that we haven't seen a dramatic decline, which could be deemed positive in these turbulent times.
'It will be more pertinent to see how markets react over the next few sessions as we have more time to digest the news.'
POLITICAL REACTION
DAVID CAMERON, LEADER, OPPOSITION CONSERVATIVE PARTY
'He is planning to borrow 348 billion pounds over the next two years, that is more -- over just two years -- than every previous government put together, not just every government since World War Two ... but since the Bank of England was first founded more than 300 years ago.
'This budget does not do enough to bring the public finances under control.'
NICK CLEGG, LEADER, OPPOSITION LIBERAL DEMOCRATS
'The worst of times demands the best of budgets but today we got a mish mash of recycled announcements.
'The economic crash is not the result of a few minor mistakes, patchwork repairs wont fix it. We need to do something fundamentally different and that needs to start with a different kind of banking system.
'We need a banking system where no bank is too big to fail, where high street banks take no unnecessary risks with people's money.'
ALCOHOL DUTY INCREASE
MIKE BENNER, CHIEF EXECUTIVE, CAMPAIGN FOR REAL ALE
'This further beer duty increase will push more valued pubs over the edge resulting in job losses, reduced government tax revenue and many more deprived of their favourite local pub.'
'It is disappointing that the Chancellor has ignored widespread public concern about the plight of Britain's pubs and decided to press ahead with an increase which will result in yet more valued community pubs closing down'
BRITISH BEER AND PUB ASSOCIATION
'Today's Budget signs the death warrant for thousands of Britain's pubs and for tens of thousands of British jobs.
'Pubs play a vital role in the economy and in local communities. Yet six are closing every day and more than 2,000 have gone in the last 12 months alone. The Chancellor's unfair and unjustified announcement today condemns thousands more to shut for good.
'At a time when the rest of the economy is getting a supporting hand, the beer and pub industry is being singled out for punitive action. The result will be more pubs closing, more jobs being lost and more people consuming alcohol outside supervised, licensed premises.'
PROPERTY
DAVID BROWN, COMMERCIAL DIRECTOR, LSL PROPERTY
'This is a start but it doesn't go nearly far enough. There are incipient signs of recovery in the housing market, but green shoots need nourishment - or they will wither.
'Extending the stamp duty holiday might encourage some movement at the bottom of the housing ladder, but it's not a permanent fix for the housing market. This sector of the economy is vital to the health of the wider UK economy - and the government's piecemeal approach to boosting it falls short of the mark.
'Government guarantees of new lending may help, but I'm disappointed the government failed to deliver a comprehensive package for one of the most important sectors in British industry.'
KESHAV THUKARAM, MANAGING DIRECTOR, SMARTLANDLORD.CO.UK
'The Chancellor's extension of the stamp duty holiday might encourage a few more first time buyers back into the market, but could result in gridlock when it returns next year.
'False starts won't help anyone and the market needs real reform to get it back on its feet. With such a high government deficit, abolition of the tax is unrealistic, but it should be incumbent on the seller to pay - not the buyer. That way all first time buyers will be exempt and the tax will fall most heavily on the elderly with more housing wealth.'
BUDGET MEASURES
HENK POTTS, STRATEGIST, BARCLAYS WEALTH
'The Chancellor is being more cautious than he has been on his estimates, highlighting what a perilous state the country's finances are in and what a desperate state the UK economy is in.'
GOVERNMENT BORROWING
PHILIP SHAW, CHIEF ECONOMIST, INVESTEC
'The Chancellor has hinted at some tightening in fiscal policy from next year and together with stronger economic growth that should begin to deliver an improvement in the budget deficit.
'However with net borrowing expected to be 5.5 percent of GDP in 2013/14 we would still point out that this is an extremely high level of government borrowing over the medium term.
'In pound terms the 97 billion is greater than the deficit which was recorded in 2008/09, just to give an idea of the scale of it.'
ECONOMIC FORECASTS
STEPHEN LEWIS, CHIEF ECONOMIST, INSINGER DE BEAUFORT
'I think this year's forecast is probably fairly realistic. It's probably going to sit somewhere between between three and four percent (contraction).
'Next year, it seems a shade optimistic to me. Most forecasters would be looking for recovery to start early next year and therefore looking for slightly less growth than what he sees. It would be in the 0.5 to 1 percent range.
'What's most unrealistic of all is his projection for years 2011 onwards because I think it's going to be difficult to achieve 3.5 pct growth annually over that period.'
JONATHAN LOYNES, CHIEF ECONOMIST, CAPITAL ECONOMICS
'I think they are as we expected him to announce but they are stronger than ours, we've got the economy contracting by 4 percent this year and then by another 1 next year so we would be more pessimistic than him.
'It is a bit more optimistic than the consensus forecast for next year but not dramatically so.'
(Compiled by Paul Hoskins) Keywords: BRITAIN BUDGET/
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