Experts sceptical on PBR's financial impact
10 December 2009 09:18:37
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| Insurers and consumer campaigners have criticised the report. |
The Association of British Insurers (ABI) said that savings account customers had been largely ignored by the report, while consumer group Which? has called for more customer protection measures.
Following the PBR, delivered in parliament by chancellor of the exchequer Alistair Darling yesterday (December 9th), banks are now obliged to pay a 50% tax on annual staff bonuses exceeding £25,000.
Personal finances could also be affected by the 2.5% increase to the state pension in 2010 and the reversion of the VAT rate to 17.5% from next January, both of which were confirmed by the report.
Maggie Craig, acting director general of the ABI, said: "Once again there is little [in the PBR] to encourage saving, something badly needed to develop a more balanced economy as the country emerges from recession."
Phil Jones, personal finance campaigner at Which?, added: "The chancellor has promised to get tough on bonuses, but now he must listen to people and make real changes to the banking sector by putting consumers at the heart of reform."
Meanwhile, prepaid cards provider Caxton FX has also published a response to the PBR's newly-downgraded forecast for the UK economy.
Mr Darling said that UK GDP was to decline by 4.75% during 2009, more than the 3.5% drop predicted in April.
Public borrowing is also now thought likely to reach £178bn this year, up from the previous forecast of £175bn.
Duncan Higgins, senior analyst at Caxton FX, said: "The chancellor's optimistic growth forecasts for next year are unlikely to ease concerns over the UK's deteriorating fiscal position."
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