Moore added that it was important to "remain forward looking and vigilant in regards to the tax rises" that the bank believes are coming.
Dean Turner, economist at UBS Global Wealth Management thought OBR figures showing that the economy will be back to pre-pandemic levels by mid-2022 were encouraging. "Although the sting in the tail was warning that the economy will still be 3 per cent below the pre-pandemic trend five years from now."
Turner thought the deferred rise in corporation tax was at the top end of expectations but eased by the Chancellor “offering companies an extremely large tax cut linked to investment for the next two years.”
None of yesterday's measures are likely to have a material impact on the economy in the short term, he said. “Instead, the easing of lockdown restrictions will be the more important factor in boosting GDP from 2Q onwards. Sterling will also benefit, he said, and “we continue to see the pound higher as the economic recovery builds.”
Many responded to outlines for boosting green finance and sustainability and creating new leading roles for the City after Brexit. The government has pledged £12 billion in investment capital and £10 billion in state backed loans as part of a new infrastructure bank based in Leeds.
James Purcell, group head of ESG, sustainable, and impact investing at Quintet Private Bank, said that while the EU has led in green finance and sustainability, "Britain can credibly compete” now. “We can’t get to net-zero without taking carbon out of the atmosphere. Carbon offsets are a critical part of the toolkit – scaling credible offsets is hugely important, and the City of London now has the opportunity to be the world leader.”
Mazars’ chief economist George Lagarias said the budget showed a material shift in the UK’s economic landscape, where the UK economy was in a unique position in a “bout of global economic de-synchronisation.”
“On the one hand, it is en route to becoming the first G7 country to take advantage of vaccinations and turn the corner in returning to a post-COVID-19 “normality”. On the other, it is now facing a much grimmer economic landscape than in December 2019.
"Growth conditions are tepid and the economy might find itself countering the “pending” unemployment, assured job losses, which may not manifest until the furlough scheme ends in September. A confluence of post-lockdown rising demand and supply chain breakdowns could further burden the economy with transitory inflation, at least in 2021. This is also true of a “hard Brexit,” Lagarias said, which is putting additional pressure on sensitive industries and exports.
This could be further constrained by ballooning debt which may rise above 115 per cent of annual GDP in the next few years, he said.
In his view, the budget reflected the UK’s need for a quick rebound, with investing incentives such as the “super-deduction” and VAT cut extensions that would be balanced in the future by a higher corporation tax.
“From a broader perspective, what is important in this budget is the government’s push to decentralise the economy, both in geographical terms and in industry support terms. The scope is much broader than targeting the most afflicted industries or groups. This budget could be the beginning of a material shift in the UK’s economic landscape, a strategic goal for the post-Brexit economy.”
Coinciding with Wednesday's budget, the Chancellor raised the review of UK listings rules to make the City more competitive. The review was led by EU financial services commissioner, Lord Jonathan Hill, amid concern that the UK risks losing out to Amsterdam, New York and Hong Kong in attracting fast-growing technology firms and other knowledge businesses to grow and list here.
Sunak also announced the locations of eight new so-called freeports at East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames, and Teesside.