Growth is now predicted at -0.1 per cent rather then the 0.8 per cent which was predicted when the Budget was delivered in March this year.
Although Osborne based his speech to parliament this afternoon around the pillars of protecting the economy, growth, and ‘fairness,’ austerity measures appear set to continue beyond the next election.
However amid the bleak headlines there may be some areas for some very cautious optimism.
The main rate of corporation tax will be cut by an extra one per cent to 21 per cent from April 2014.
This goes further then expected as he was expected to cut corporation tax from 24 per cent to 22 per cent by April 2014.
Meanwhile a notable concession appears to have been made to small businesses through capital spending allowance which has been increased tenfold from £25,000 to £250,000.
As Kingston Smith W1 tax partner Mike Hayes says, ‘If you buy equipment for your office, maybe a digital network, or phone system there’s scope for increased relief.’
Less positive is the move to reduce the amount employees can contribute to pension schemes.
‘At the moment it’s £50,000 per annum but from 2014 that’s coming down to £40,000 per annum, so the cap is reduced whether you’re in a private or an employer scheme,’ says Hayes.
And while we’re on that point any designers below 50 will have to wait until 67 to get their state pension.
Meanwhile unemployment is set to peak at 2.8 per cent, which is 8.3 per cent of the population – lower then the previous prediction of 8.7 per cent.