Building a resilient future: Our take on the Autumn Statement

Jason da Silva, Director of Global Investment Strategy, reflects on yesterday’s Autumn Statement and looks at the impact this may have on investors.


23rd November 2023


Jason Da Silva


Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn fiscal statement yesterday, where he unveiled a series of tax cuts aimed at growing the UK economy. Over the last year, the Treasury has had a tough job of repairing the nation’s finances amid weak economic growth, high inflation, and global unrest.

However, the combination of better-than-expected growth and higher inflation has boosted tax receipts into the Treasury. With inflation recently halving compared to this time last year the Chancellor now feels at ease redirecting some focus from stability to growth and drawing the battle lines for a 2024 General Election.

Our key takeaways


The biggest surprise in the Autumn Statement was the reduction in the main rate of employees' National Insurance (NI) contributions to 10% from 12%, effective from 6 January 2024. This will increase household income by an estimated £8.7 billion (0.5%) in 2024/25, according to the Office for Budget Responsibility (OBR).

The most significant tax cut unveiled was the permanent implementation of "full expensing" for business investment spending. This measure comes at a substantial cost, amounting to £11 billion annually for the Treasury. Additionally, extending the 75% discount on business rates for retail, hospitality, and leisure for another year constitutes an additional tax relief for companies.

Supply-side reforms

A significant portion of the Chancellor's address was dedicated to enhancing the supply side of the economy, with a focal point on pension reform. The Treasury is actively pursuing the consolidation of pension pots, aiming to facilitate more effective risk pooling and create opportunities for heightened investments in high-growth enterprises. Notably, there has been an uptick in investment spending in the fields of artificial intelligence and green industries. Additionally, a back-to-work plan was introduced to bolster labour force participation.

Cost of living support

The government remains committed to aiding the most vulnerable households, as evidenced by the decision to increase working age benefits by 6.7%. The triple lock mechanism remains in effect, leading to an 8.5% rise in the state pension. Furthermore, the national living wage for workers aged 21 and above is set to increase to £11.44 per hour.

What will the impact be on the UK economy and markets?

Much of the Autumn Statement was well signalled ahead of time so the market impact has been muted.

  • Positive news emerged for the short-term economic outlook, as the Office for Budget Responsibility (OBR) forecasts indicate that the UK is poised to steer clear of a recession this year. However, projections for 2024 and 2025 have been significantly revised downward. Encouragingly, the government's debt outlook has improved, with OBR predictions suggesting compliance with fiscal rules, including reducing debt as a percentage of GDP and maintaining annual borrowing below 3% of GDP throughout the forecast horizon.
  • Despite the past year’s improvements in economic and debt stability, the Autumn Statement underscores the lingering challenges, with economic growth remaining modest and national finances constrained. Despite the tax cuts outlined in this budget, there is an anticipation of an increasing tax burden on the economy in the years to come. The growth measures announced are considered a positive step.
  • The Chancellor still has a fine balancing act to contend with to avoid over-stimulating of the economy, as inflation remains above the Bank of England’s 2% target. The National Insurance cuts will support consumer spending and the impact on inflation will be interesting.

Our assessment of the Autumn Statement is that it is marginally supportive of UK growth in the year ahead. Despite facing financial constraints and grappling with elevated inflation, the Treasury's capacity for substantial budgetary adjustments remains restricted.

How does this impact investors?

Other than the reduction in National Insurance, not much has changed in terms of personal taxation including ISAs, pensions, capital gains tax and inheritance tax.

However, one key change to note is that investors will be able to pay into multiple ISAs in each tax year. While the limit was not increased to the anticipated £25,000 limit, remaining fixed at £20,000, this flexibility provides investors with more options for optimising their savings and investment strategies.

The consultation on a pension “pot for life” is an interesting development, one we will watch with interest.

We continue to keep our clients abreast of the changing economic landscape, keeping an eye on potential challenges and opportunities that may arise. You can find more detail in our latest Investment Series Q4 Update where we share our views and decisions we have implemented in our portfolios.

If you have any questions or would like to discuss how this impacts you further, please feel free to reach out to your relationship manager.

Investment Committee Series

Our Investment Committee share their key decisions and outlook for Q4 2023 here

Investment Committee Series Q4 2023 brochure

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Author -

Jason da Silva

Jason Da Silva

Director, Global Investment Strategy

Jason Da Silva joined Arbuthnot Latham in 2022, as a senior research analyst and in 2023 he was promoted to Director, Global Investment Strategy. He most recently spent four years at boutique asset manager Obsidian Capital focused on direct equities, fixed income, commodities, and currencies. Previously, he worked at EY, where he became a Chartered Accountant before rotating into the EY corporate finance division. Jason holds both a CA(SA) and a CFA.


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