The Budget has about as much impact on the UK stock market as our futile attempts to improve our personal finances by stocking up on cigarettes and booze the night before tax increases kick in.
What happens in the UK is relatively unimportant when it comes to the profits generated by Britain's blue chips. We may think it is crucial, but half the companies in the FTSE generate negligible sales from the UK.
What's more, about 80 per cent of FTSE 100 company profits are generated outside of the UK. Take GlaxoSmithKline. Its UK operation only accounts for 6 per cent of total group revenue. Meanwhile, the US accounts for around a third of turnover while the rest of the world the other 60 per cent. In the case of sugar refiners Tate & Lyle, only 2 per cent of revenue is generated in the UK.
Vodafone is another company with its roots firmly planted on British soil. However, its revenue-generating branches are spread across the globe. Less than 12 per cent of sales and profit are generated in the UK.
Consequently, any tinkering to corporation tax and rules governing foreign companies are more likely to benefit its accountants and tax consultants than affect the performance of the company.
Other companies that find the UK economy largely irrelevant include SABMiller. The brewer generates around half its revenue from South Africa, Columbia and Peru. In fact, less than 2 per cent of sales come from the UK, so changes to alcohol duty here are unlikely to have any significant impact on its bottom line.
The relative unimportance of the UK economy to FTSE companies may go some way to explain the poor correlation between the blue-chip index and the UK economy. In the 1990 recession, the FTSE 100 index actually climbed 10 per cent while the UK economy shrank by 3 per cent.
If further proof were needed, we only have to look at the more recent downturn. Between June 2009 and today, the UK economy contracted around 2 per cent. Over the same period, the FTSE has climbed 66 per cent. If dividends are included, the return is 89 per cent. In fact, no less than 44 FTSE 100 companies have doubled in value since June 2009 and shares in 74 have increased by more than 50 per cent.
The upshot is that the Budget should be seen by investors as an interesting sideshow. Do, however, make a note of the ISA allowance rise and other incentives that encourages us to save and invest. But don't be distracted by political-driven tax measures because investing is more important than that.
David Kuo is director of the financial advice site fool.co.uk