This budget was always going to be especially tricky for the chancellor. Hitting fiscal targets amid wide divisions over Brexit, while also spending more on populist policies to distract voters from Conservative party infighting and dysfunctional cabinet, was a big ask.
Hammond wasn’t fibbing when he promised a balanced budget. Once tax giveaways, downgrades to growth forecasts, billions more for the NHS and the rest are put through the mincer, both the FTSE 100 (UKX) and sterling are unchanged.
Given Britain’s housing crisis was an obvious target for the chancellor, he really needed something substantial to make his aim of 300,000 new homes built every year anything more than a pipe dream.
Committing to at least £44 billion of capital funding, loans and guarantees to support the housing market will go a long way to achieving the chancellor’s ambitious target.
Abolishing stamp duty for first-time buyer purchases up to £300,000 is a tiny saving, however, and buyers, especially in London, will still require a huge deposit to get a foot on the housing ladder.
The market hung on Hammond’s every word, causing a comical yo-yo effect as the chancellor slowly revealed his strategy. Taylor Wimpey (TW.), Persimmon (PSN) and Barratt Developments (BDEV).
A threat to use compulsory purchase powers where builders are believed to be holding land for commercial reasons, could cause sleepless nights.
Overall, Hammond’s ideas are sound, but probably not enough of a catalyst to get sector share prices rising significantly near-term, given mixed results in the run-up to this budget.
The promise of government money for fire safety work following the Grenfell tragedy will mean more work for firms like Mears (MER), Mitie (MTO) and Bilby (BILB).
Hammond’s promise of more money for better recruitment within the NHS will be a boost for recruiter SThree (STHR).
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