Industry leaders praised a Budget package of tax cuts and investment to boost business, with smaller companies in particular given help in the wake of the disruption caused by the coronavirus and the UK’s exit from the EU.
“This was a box office Budget,” said Jonathan Geldart, director-general of the Institute of Directors, who pointed to measures to cut costs and support loans to businesses.
“Given the circumstances, the chancellor had to be bold, and he came through for business today.”
The government committed to a range of measures designed to relieve pressure on smaller businesses.
These included £130m to extend the start-up loans programme, support for small and medium-sized enterprises through growth hubs and the abolition of business rates for small companies in the leisure, retail and hospitality sectors ahead of a wider review in the autumn.
Ministers will also give £2.2bn in grants to about 700,000 small businesses eligible for business rate relief.
“This has been a deliberately pro-small business first Budget for the chancellor. We hope it is the start of things to come,” said Mike Cherry, national chairman of the Federation of Small Businesses.
Other changes will mean that businesses will be able to employ four full-time employees on the national living wage without paying any employer national insurance contributions — a measure expected to benefit about 510,000 businesses.
“This was a huge Budget and it’s delightful to see small businesses back on the agenda in a positive way,” said Emma Jones, founder of small business network Enterprise Nation, who described it as a “pro-business Budget”.
But she added that there were still worries over “who will pay for this largesse . . . is this the so-called ‘Brexit war chest?’”
“If they get this right then we will certainly be in line to benefit as one of the main markets for our galvanised steel is infrastructure and utilities,” said Sophie Williams, financial director of Corbetts the Galvanizers, a 200-year-old metal fabricating company in based in Telford.
“It will give us the confidence to continue to invest in what is still a very volatile economic picture.”
There were also other measures designed to help businesses, regardless of size. The annual rate of capital allowances available for investments to construct new, or renovate old, non-residential structures and buildings will increase from 2 per cent to 3 per cent — at a cost to the government of about £1bn.
Rain Newton-Smith, chief economist of the CBI, the employers’ organisation, said businesses would be happy with the focus on innovation and infrastructure spending, although she hoped for further measures on skills training, including reforms around the apprenticeship levy. She also said there could have been more on efforts to move to a low-carbon economy.
While there was no mention of Brexit in the Budget, which will disappoint some in the freight industry concerned about the need to invest heavily in border infrastructure and training, the chancellor promised to increase lending for exporters through UK Export Finance. This provides insurance to exporters and guarantees to banks providing export finance.
Stephen Phipson, chief executive of Make UK, the manufacturers’ organisation, said the chancellor recognised “the need to turbocharge investment in long-term measures which will boost the productive potential of the economy and support green growth”.
Mr Geldart also welcomed the commitment to infrastructure, saying that “directors have long been crying out for transport and digital upgrades”, adding: “The question now is how we translate that money into real improvements for local economies.”
Some smaller business groups were disappointed the chancellor had cut entrepreneurs’ relief from £10m to £1m, meaning that business owners selling their business can only reduce the amount of capital gains tax paid by £100,000, although they welcomed the decision to not abolish the move altogether.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
