Extension of Covid relief for economy very welcome

Published  03 March 2021
   3 min read

Commenting on the Chancellor’s budget, Melanie Baker, senior economist at Royal London Asset Management (RLAM) said:

“Premature fiscal tightening had looked more of a risk in the UK than in the US and euro area, so an extension of Covid-relief for the economy is very welcome. This package of measures lowers near-term risks to the recovery.

“For a mid-sized open economy like the UK, having a plan to get the fiscal finances in order is no bad thing, but it is important to get the timing right.  If the economy is not normalising by the middle of the year then worries about premature fiscal tightening may resurface.”

“The Budget was lighter on future tax increases than some perhaps feared, especially near-term, but there are significant new fiscal tightening measures in the second of half of the government projection, largely via the rise in corporation tax and the freezing of the personal tax allowance/higher rate threshold.”

About Royal London Asset Management (RLAM):

Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.

RLAM manages £164 billion of assets and employs 129 investment professionals as at 31 December 2021. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.

For professional clients only, not suitable for retail investors.

Issued by Royal London Asset Management Limited, registered in England and Wales number 2244297; authorised and regulated by the Financial Conduct Authority. Registered Office: 55 Gracechurch Street, London, EC3V 0RL.

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