Economic good cheer has been in short supply of late, but February saw the consumer confidence index rise to its highest level in 12 months.
This index measures the level of optimism that consumers have about the performance of the economy in the coming year. The research is carried out by GfK, who survey around 2,000 consumers each month and ask them to state whether they expect an improvement or a deterioration in four defined categories: personal financial situation, climate for major purchases, overall economic situation and savings level. These results are then combined to produce a figure for the overall index.
For February 2021, the headline index figure stands at minus 23, a five-point improvement compared to January. The personal finances figure is up two points to plus 4, the economic situation figure is up 14 points to minus 30 and the big purchases climate figure rose by five points to minus 19.
The resilient UK economy actually grew by 1% in the final quarter of 2020, even though there was a national lockdown for four weeks during this period, and widespread restrictions were in force for the remaining time.
The Treasury’s latest Forecasts for the UK Economy document, published on February 17 2021, shows that, according to the 22 independent forecasters, the average prediction is that the economy will grow by 4.3% this year and 5.8% next year.
All eyes are now on the Chancellor’s Budget speech on Wednesday March 3. Some commentators have suggested that the furlough scheme might need to be extended until November, which will mean it will have been in force for 20 months. It is currently scheduled to end in April, but the scheme’s end date has already been extended several times. It may be the case that Rishi Sunak opts to announce an extension until May initially, and then keeps the position under review.
Many people are also wondering if there might be an announcement of an extension to a couple of ‘holidays’. The stamp duty holiday is due to end on March 31 – no stamp duty is currently paid on the first £500,000 of a property’s value, but we are set to revert to the standard system from the end of next month, whereby only the first £125,000 is free from duty (or the first £300,000 if the purchaser is a first-time buyer).
The business rates holiday is due to end on the same date. No business rates will be payable in respect of qualifying properties in the retail, hospitality and leisure industries for the year April 1 2020 to March 31 2021.
Finally, many self-employed people will be hoping for an announcement that eligibility criteria for the Self-Employed Income Support Scheme are to be loosened.
Scott Robert are compliance consultants delivering solutions to regulated businesses.