The Spring Statement is one of the two that HM Treasury makes each year to Parliament upon publication of economic forecasts, the second taking place earlier in the financial year as part the Autumn Budget. The Spring Statement comes directly from the Chancellor of the Exchequer, and is presented to Parliament for consideration. So how could the Spring Statement affect bond holders?
Whilst big policy changes that directly affect how much we are taxed and the benefits we receive are often reserved for the Autumn Budget, the Spring Statement still potentially has the power to alter financial forecasts and provide a basis for changes to things like interest rates or decisions by investors.
Coinciding with the new financial year and key ISA transfer dates, the Spring Statement could be an important indicator for investment decisions and the availability of new funds for investment – particularly during the current (2019) political climate in the UK.
The Chancellor will also respond to and address new financial predictions from the independent Office for Budget Responsibility, including elements like projected GDP growth and UK government borrowing, with predicted impacts from major events and global changes.
The Spring Statement can also include a review of current tax policies, which could have a direct impact on bond holders (subject to personal taxation conditions), and has the potential to impact on the value of investments and other funds held by investors.
The Spring Statement, alongside other political changes in 2019, has the potential to drive change for both investors and firms offering investment opportunities – whether through the alteration of interest rates, or via market reaction to the findings presented to Parliament. Whether concentrating on savings or investment opportunities like the Just bond, the Spring Statement is one to watch!
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