Budget 2012: Osborne will focus on growth and jobs, says Schroders’ Zangana

Chancellor George Osborne is to present his third Budget today against a broadly positive backdrop - which Schroders’ Azad Zangana argues should allow him to focus on boosting growth.

Azad Zangana
Azad Zangana

Zangana, the asset manager’s European economist, points out that the eurozone debt crisis is showing signs of easing and the UK public finances are better than anticipated.

“We expect the chancellor to focus on growth measures that will not dent the exchequer,” the economist says.

“For example, the credit easing scheme will help to reduce the cost of credit through guarantees for small and medium-sized companies, while the leasing of parts of the national roads system could help boost investment in infrastructure in the future.”

Income tax is likely to be a key area of focus in this year’s Budget, with some members of the coalition pushing for a greater rise in the standard rate threshold while others want the 50p top rate axed.

Osborne will have to fund any cuts in income tax by recouping other losses to the exchequer. Zangana expects this to come in the form of tackling tax evasion stemming from the use of foreign holding companies to buy UK properties, rather than the proposed ’mansion tax’.

“Overall, we expect the chancellor to keep a tight rein on the public finances, with very little being given away,” Zangana concludes.

“The focus will remain on boosting growth and employment, but not at the risk of losing the UK’s credibility with investor.”