DAVY VIEW

The government today announced plans to deliver large increases in current spending. With an election due within five months, it is unsurprising that these plans are frontloaded to this year. Some additional tax cuts and higher capital spending have also been announced. However, household supports for the cost of living appear to be the priority for this Budget, aligned to recent polling which ranked high living costs as the most important issue for voters. The government is also increasingly reliant on corporation tax receipts to finance large budgets, and this poses a risk to the economy. To effectively address infrastructure gaps, we believe the next government needs to deploy smaller budget packages with a clear priority on efficient delivery of capital spending plans.