Higher rates is the unanimous verdict

Business Taxes: THE REACTION

The City and industry agreed the Budget would mean higher interest rates, rising to 8 per cent or more next year, which could in turn push sterling to DM3.

There was disappointment at the Chancellor's attempts to dampen consumer spending and the housing market. Roger Bootle, economist at HSBC, said: "I'm very disappointed. The reduction in Miras is pathetic, absolutely pathetic. What is the argument for not getting rid of it altogether? I find it quite incredible.

"I think this is the merging of two Budgets - Gordon Brown's instincts, which were right, and Tony Blair's timidity as far as the measures go. As for damping down consumer demand, this Budget is a mouse."

The Confederation of British Industry said interest rates would have to go up higher than otherwise. Mr Bootle's estimate a rise of at least half a per centage and, and perhaps a further similar increase depending on the pound."

Paul Turnbull, chief UK economist at Merrill Lynch, also thinks interest rates will have to rise, probably to 8 per cent by the first half of next year "and could go higher".

Sir Ronald Hampel, chairman of ICI, said the Budget's emphasis on stability, skills and investment was encouraging, but he was worried by the strength of sterling and the abolition of tax credits on dividend payouts: "The budget measures may not be enough to slow down growth in consumer spending... the welcome cut in corporation tax will increase investment, however there are doubts about the impact of the abolition of tax credits on companies' investment plans. "

Frank Eaton, chief executive of Barratt Group, the builders, said: "This is a clear signal the new Government is continuing the previous trend of attacking home ownership and placing unnecessary financial burdens on homebuyers. There is no need to cool a housing market that outside the South-East is only lukewarm."

Dennis Webb, chief executive of Beazer, one of the UK's largest housebuilder was more positive: "This Budget should sustain the housing recovery. We are pleased income tax bands were left where they are - it gives people a chance to plan their spending."

"And on stamp duty they left first time buyers alone - bigger spenders should be able to cope with the increase. We are delighted that the Government wants to get away from boom and bust. Stability is what we all want."

Richard Jeffrey, group economist at Charterhouse, said: "This Budget is not enough of a constraint on consumer spending - it throws the ball right back to the Bank of England. The immediate speculation is how much the Bank will have to raise interest rates. That has to be negative for share prices.

"However, construction companies will benefit from the housebuilding programme and refurbishment of schools."

Howard Maguire, head of UK equities at Threadneedle Investment Management, said: "I think that sterling will continue to strengthen. The drop in corporation tax is a nice counterbalance to the removal of dividend tax credits. Companies exposed to strong sterling and which have low dividend cover will have had no relief from this Budget."

Predictably, the film industry was delighted by the unexpected tax breaks on production costs, coming as it does after years of refusals by Tory and Labour governments to consider helping the industry.

Gary Smith, chairman of AIM-listed film group Winchester Multimedia, said: "At least the Government is behind the film industry.

"The measures will help keep films in Britain. But I would have liked to see more measures to offer tax relief for investing in our film industry."

The Engineering Employers' Federation welcomed a "pro-business Budget".

"We are encouraged by the support for investment by small and medium size businesses, especially the reduction in corporation tax and the increase in capital allowances. The engineering industrywill welcome the increased spending on housing health and education.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
health
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
News
Sir Chris Hoy won six Olympic golds - in which four events?
news
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Finacial products from our partners
Property search

Current accounts are too costly and confusing, says CMA as it announces investigation into Britain's biggest banks

Competition regulator to investigate market where it's hard for customers to make comparisons and the big banks' charges can be set too high
All the signs have been pointing up for buy-to-let, but there are clouds on the horizon

Buy-to-let: is it a boom or a bubble fit to burst?

People borrowing to be landlords could face the same restrictions as homebuyers, with MPs voicing fears that property speculation may be overheating the market

Moment of truth for payday lenders: Watchdog plans to curb cost of short-term loans

The chief of the City watchdog, Martin Wheatley, spoke exclusively to The Independent's Simon Read about its attempts to control the worst excesses of unscrupulous high-cost credit companies

Consumers given power to choose a green deal

How would you like to be able to choose how your electricity is made and even where it come from? It may sound futuristic and fanciful but the independent supplier Co-operative Energy has made it a reality this week.

'Scrap the trap': calls for change grow as banks are told to play fair with loyal savers

City regulator says existing customers suffer worst rates

Motor insurers divided on proposals for whiplash ban

MPs want medical evidence for claims. Will this bring higher premiums?

British Gas repays £1m for mis-sold deals

British Gas was yesterday forced to pay back £1m to its customers after mis-selling them energy deals.

Bare necessities of life cost a pensioner £10,000

Pensioners now have to spend £10,387 a year on basic necessities such as food and fuel. new figures published today reveal.

Six months since its introduction, Obamacare has set market's pulse racing

As America's health reforms take effect, some firms look well placed to benefit, says Simon Read

Holidaymakers warned over hidden charges when opting to pay in sterling abroad

Fresh warnings emerged this week that overseas retailers and hotels aren't playing fair.

Employees will be able to request flexible hours in drive to make workplaces family friendly

From next week employees will be able to request changes to working hours. Rob Griffin weighs up the options

E2Energy's wind-turbine scheme offers green investors 7.5 per cent a year

If you're fed up with paltry returns on your savings and are interested in green energy, a new loan-based crowdfund launched this week could be a better home for your cash.

Why miss the chance of tax-free returns as Isas raise their game?

The tax-free limit of £15,000 is a big jump and rates for savers are starting to edge up, writes Simon Read
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Graduate Recruitment Resourcers - Banking Technologies

    £18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...

    Associate Recruitment Consultant - IT

    £20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

    Business Analyst

    £300 - £350 per day: Orgtel: Job Title: Business Analyst Rate: £300 - £350 per...

    Day In a Page

    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform