Stock and bond markets rally ahead of the budget
And finally, the City of London is ending Budget Day Eve in good heart.
The stock markets have closed higher tonight, with the FTSE 100 share index ending the day 75 points higher, or +0.78%, at 9,609 points.
Banks were among the risers, following reports that they will avoid a windfall tax in tomorrow’s budget. Kingfisher jumped 6% after the DIY chain lifted its profit guidance this morning.
UK bonds have rallied today too, pushing down the yields (or interest rates) on British government debt. 10-year bond yields have dropped by 5 basis points (0.05 percentage points) to 4.495%, while 30-year yields are down 4bps at 5.32%.
Reminder, our story about the sugar tax is here:
Chartered accountancy group ICAEW are concerned that extending the soft drinks industry levy (SDIL) to packaged milk-based drinks will introduces unnecessary complexity and only yield limited public health gain.
ICAEW argues that lowering the sugar threshold from 5g to 4.5g targets just 11% of the market – many drinks affected will only need to remove a small amount of sugar to remain exempt
Ed Saltmarsh, ICAEW technical manager, VAT and Customs, said:
“The success of the original soft drinks industry levy was built on its simplicity and the clear incentive it created for reformulation. Introducing complex allowances for milk-based drinks risks undermining that simplicity.
“Furthermore, we are concerned that shifting the goalposts to 4.5g chases diminishing returns and penalises the very businesses that previously reformulated, while leaving the highest-sugar drinks on the market untouched.
“It also creates a confused tax landscape. If the government believes the health harms of sugar outweigh the nutritional benefits of milk, it raises questions about why other high-sugar categories, such as pure fruit juices and smoothies, remain entirely exempt despite often containing more sugar than the drinks being targeted by the threshold change.”
