Tax cuts on the way?
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
The prospect of Jeremy Hunt cutting taxes in the Budget has increased after the latest data on the public finances showed the government has borrowed less than thought.
Public sector borrowing fell to £7.8 billion in December, much less than the £14 billion expected, according to the Office for National Statistics.
That £7.8 billion is the least that the government has borrowed in a December since 2019. It is less than half of the £16.2 billion that was borrowed in December 2022.
The £14 billion that was expected is the number that the Office for Budget Responsibility, the government’s spending watchdog, had pencilled in for the month.
However, the public finances benefited from higher VAT and income tax receipts, smaller-than-expected government spending and lower interest payments on debt, which is due to the interest rates on the UK’s debt falling as inflation eases and expectations rise that the Bank of England will cut interest rates.
The chancellor is scheduled to deliver the Budget on March 6 and spoke last week about the prospect of cutting taxes to boost the economy. You can read more on his comments here
Here is some of the reaction to the government borrowing figures today…
The chancellor has been meeting with the bosses of the UK’s biggest banks today…
Despite the better-than-expected borrowing figures it is worth remembering that the public finances are not in a great state overall. The graph below shows the UK’s net debt as a percentage of GDP…
You can find the full report from the ONS here
Podcast…
The latest episode of our Business Leader podcast features an interview with Suranga Chandratillake, general partner at Balderton Capital, about how he reached the top of the venture capital industry and why he swapped being the chief executive and founder of a promising technology company for investing in them instead. The episode covers the rise and fall of Autonomy, what venture capital investors look for in a promising business, and why chief executives need to change their approach to work to avoid burning out.
You can listen to the episode via Substack here, Apple here or Spotify here
Other stories that matter…
1. London accounts for nearly half of all the service exports from the UK, according to a new report by the Resolution Foundation. The dominance of the City and financial services industry is a key driver behind this, but the report says that London’s prominence is “far from inevitable and must be addressed”. More here
2. Rishi Sunak is opposing plans for Royal Mail to scrap letter deliveries on a Saturday. More here
3. Morrisons has scrapped the four-day working week it offered to staff at its head office in Bradford, Yorkshire. Employees were unhappy about having to work one Saturday every month as part of the schedule. Instead they will work four-and-a-half days during the week. You can read more from The Times here and see the original story on this from The Grocer magazine here
4. Younger workers respond to stress in the workplace differently to older staff, according to the latest annual Britain’s Healthiest Workplace report, which is a survey of employee wellbeing by the Financial Times and Vitality. Older generations are more likely to turn to alcohol but the young are more likely to report depression and burnout. You can read more in a column by the FT here and find more details about the report here
5. Author Nassim Nicholas Taleb developed the idea of “antifragility” to explore how things can get stronger when put under stress. This is the opposite of being fragile and is not the same as being resilient, which means to withstand the stress, not get stronger. A new analysis by Psychology Today has looked at why entrepreneurs should adopt this mindset. For example, it looks at using frustration to explore the reasons behind why something happened and using moments of fatigue to try to think creatively about breakthroughs. You can find that piece here
And finally…
The Unruly Pig in Woodbridge, Suffolk, is the best gastropub in the UK according to the latest annual awards. The pub has topped Estrella Damm’s annual list of the top 50 gastropubs in the UK. You can find the full list - and the pubs in your area - by clicking here
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Best
Graham