Equity Research; 2023 Budget

2023 Budget

The Chancellor now expects the UK economy to contract by 0.2% in 2023, as opposed to previous ONS forecasts of -1.4%.

Looking forward GDP growth of 1.8% is expected in 2024 rising to 2.5% in 2025. The UK’s debt to GDP is expected to decline to 92.4% in 2024.

The inflation rate is forecast to decline to 2.9% by the end of 2023 from 10.1% in January 2023. This assumes a rise in the unemployment rate of 1% as a result of the slowing UK economy.

The main Budget changes are as follows:-

Pension Lifetime allowance abolished

This move is expected to encourage the over 50s back into work. Since the C-19 pandemic the UK has lost a significant number of the working population aged over 50 creating skills shortages and pay inflation.

New Investment Zones

This ambitious plan will succeed if only 1 of the 12 investment zones morph into another Canary Wharf.

Corporation tax

After a 5 years absence the smaller company rate returns! Corporation tax rise was flagged last October and the Chancellor has followed through.

Defence Spending

Whilst below Ben Wallace’s requests, the move to boost defence is long overdue and considering geopolitical tensions the right course of action.


This price freezing measure costing £6bn should reduce inflationary expectations. GBN is likely to get the Green Lobby up in arms, and rightfully so given the very patchy global safety record of nuclear power.

Small & Medium Sized Company Allowance

Devolved Government grants


Artificial Intelligence/ UK supercomputer


This was a carefully considered Budget aimed at increasing UK productivity and boosting its workforce output. One of the reasons for the slow rebound since the C-19 pandemic has been a smaller workforce and a loss of expertise and leadership due to early retirement/ work/life balance issues. Whilst great for the individual, early retirement does not boost the UK’s economic performance.

There is an equal focus on ‘cost of living’ issues and not piling on economic hardship. The childcare plan will help young families and amounts to fairly obvious ‘vote buying.

Capital markets have ‘bigger fish to fry’ today (UK100: -3%) and the Budget has fallen on deaf ears. The rise in UK corporation taxes to 25% will hit EPS, profit growth and dividends, taking companies back to the prevailing tax rate a decade ago. The government has re-prioritised the UK’s social fabric today at the expense of the private sector, so relatively typical mid-term positioning, which was expected.

Subscribe to our Award-winning Newsletter

We provide daily market data in the form of our award-winning newsletter, The Morning Call and The Market Close.
You can subscribe to this information at any time to help you make the most of your investment.

Quick Sign-up

Get Started with CSS

Open an Account

Subscribe to our award winning daily newsletter

Voted "Best Market Newsletter" in 2012, 2014, 2015 and 2017 by the City of London Wealth Management Awards

Subscribe to our newsletter (Popup)

By signing up to our free email, you are consenting to receive these promotions. The newsletter is sent up to three times per day during the week and up to once per day over the weekend and is directed at UK residents. The newsletter contains company news, market movements, CSS research and promotions and breaking economic news. Occasionally our newsletter will contain advertisements from trusted partners. However, we will never give, sell or rent your email address to any other companies. If you want to stop receiving our free emails you can unsubscribe at any time by clicking on the link at the bottom of each email. You can read our privacy policy here.

No, thank you I am already subscribed