As
Leasing Life went to press, the 2011 Budget was being read
out in the UK parliament.
Many of the measures introduced were
welcomed by the business community.
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A cut in fuel duty of 1 pence per
litre could be seen as a drop in the ocean considering the other
upward price pressures on petrol. But the decision to scrap the
fuel duty escalator was broadly welcome.
Cuts to corporation tax were welcomed
too, and should help to support growth and to boost business
investment.
By far the most striking news was the
revised growth forecast of 1.7% for 2011. Apparently the Chancellor
expects modest growth at best.
After a rough 2009, hopes of a robust
bounce back were dashed by 0.6% contraction in UK GDP in the final
quarter of 2010.
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By GlobalDataThe UK economy is not the only one to
suffer the lingering effects of the banking crisis.
Spain’s GDP fell by 0.1% in 2010,
after dropping 3.7% in 2009. The number of jobless in Spain grew by
1.6% to 4.3m in February 2011.
And while the Spanish government
predicts 1.3% growth this year, the IMF forecasts just 0.6%.
The IMF’s forecast for the UK is 2%
for 2011.
Spain’s closest neighbour, Portugal,
is poised to become the third victim of the eurozone sovereign debt
crisis, after Greece and Ireland. Portugal will look to refinance
€10bn of maturing debt in April and June, potentially sparking a
crisis.
Government rescue packages and growth
incentives can help to stabilise institutions – economies, even –
and to promote growth.
Which is why the budget pledge of £3bn
(€3.4bn) for a green investment bank is a heartening development.
The price of petrol is one factor restricting growth.
Support for green technology will not
only reduce fuel bills in the short term, improving companies’
cashflow, but it will also boost investment in green
engineering.
This should provide cleaner,
cheaper-to-run machinery to support continued growth in years to
come.
Liz Bury
