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UK News

Spending Review & Autumn Statement

UK Chancellor George Osborne delivered the combined comprehensive spending review and Autumn Statement in November, and the welcome surprise for many was his decision to not cut tax credits. The Chancellor used an unexpected £27bn windfall caused by lower debt interest payments and projected higher tax receipts to scrap tax credit cuts and protect police budgets prompting some critics to declare "the end of austerity"!

The key points announced were:

  • Tax credits - expected changes and cuts ditched altogether, great news and a big relief for many people

  • Stamp duty - increase by 3% for buy-to-let and second home buyers

  • New houses - 400,000 new affordable homes in England by 2020

  • Help to Buy  - new scheme just for London

  • Police - no cuts to budget

  • Social care tax - new tax to be levied by local authorities as a 2% council tax increase

  • Government Departments - spending cuts: Transport -37%, Business -17%, DEFRA -15%, Energy - 22%, Culture, Media and Sport -22%

  • Budget surplus - target of £10bn by 2020 maintained

  • Local governments - allowed to keep all cash generated from asset sales

  • Apprenticeship levy - set at 0.5% of payroll, with £15,000 allowance to exempt small businesses

  • Office for Budget Responsibility (OBR) forecasts - UK growth outlook remains broadly unchanged from July

  • Small business rate relief - extended for 12 months to April 2017

  • Science funding - protected in real terms for rest of Parliament

From an housing market point of view there are several points in this review that raise our spirits, especially the announcement of plans to make £2.3bn available to private developers to build 400,000 new homes in England. Additionally, the London Help-to-Buy scheme which is to offer interest-free loans worth up to 40% of the value of a newly built home will be a great help, enabling people to get moving on the property ladder. There were a few more detailed proposals announced which will also potentially boost the market including the removal of restrictions on shared ownership and planning system reforms designed to deliver more homes.

For more information on the key points and an at-a-glance review of the Spending Review and Autumn Statement see the BBC News page:

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UK Good News

Recent figures for UK manufacturing suggest the sector had enjoyed its best month for more than a year in October and the “Purchasing Managers’ Index” was up significantly which indicates increased confidence.

There was also good news on reported on UK jobs - unemployment fell to a 7 year low of 5.3% in the three months to September, and the number of people in work rose to 31.21m – 177,000 more than the April to June quarter and an increase of 419,000 on the same period last year.

UK inflation remained slightly negative in October, and the Bank of England signalled that the predicted increase in interest rates may be even further away than previously indicated. The Bank said that the outlook for global growth had weakened and this had “depressed the risk of inflation”, with suggestions that no rate rises expected until the second quarter of 2016 – possibly even later.

Jaguar Land Rover announced plans to double the size of its site near Wolverhampton and take on hundreds of new workers, as it invested £450m in its engine manufacturing centre.

The FTSE-100 index of leading shares started November at 6,361 and ended the month five points lower at 6,356 – still 3% lower than the level at which it started the year - so all this good news not yet finding its way to make an impact yet.

World Economic Highlights & Lowlights

World stock markets fell after the awful attacks in Paris in November. Overall economic activity continues to be depressed, largely down to the ongoing weaker demand from China. One indication of the weaker demand is the current record oil stock levels, which stands at 3bn barrels - this indicates that oil prices are likely to remain low well into next year.


The attacks in Paris understandably dominated the European news in November, and as a result the events are expected to have a negative impact on the French economy and possibly wider afield.

Recently the EU suggested that the Eurozone was looking forward to “a modest recovery” over the next two years, with growth of 1.9% this year, 2.0% in 2016 and 2.1% in 2017. However. other sources including The Institute for Public Policy Research have suggested that high levels of unemployment would continue unless there was an increase in productivity.

The German economy slowed in the third quarter of the year as German imports grew by more than exports. Despite the mixed news on the economy the German stock market enjoyed a good month in November, rising by 5% to close at 11,382. The French market was up just 1% to 4,958.


The US manufacturing sector was reported as having grown at its slowest pace for more than two years in October. The Institute for Supply Management recorded a fourth consecutive month of declining factory activity.

Despite the bad news from manufacturing, there was good news for US jobs as the economy added 271,000 jobs in October – well ahead of the 185,000 economists had forecast. This increased speculation that the Federal Reserve would finally raise interest rates in the near future.

China/Far East

As expected, China’s manufacturing activity contracted for the third month in a row, and there seems little sign of an upturn in the near future.

The Japanese stock market continued to perform well - shares reached a 3 month high in November. The market finally closed the month at 19,747 – up 3% in the month and 13% since the start of the year.

Emerging Markets

It was a mixed month for the major emerging markets. Both India and Brazil saw their markets fall by 2% during November. Russia, on the other hand, returned a good month with the stock market there rising by 3%.