THE senior manager of Lloyds TSB corporate banking has said a growing UK economy is good news for the Manx economy.
Trevor Kirk has shared his personal views on how the UK Budget may affect the Island with isleofman.com:
"The UK budget announcement contained a downgraded forecast for the UK Economy growth in 2011 from 2.1 percent to 1.7 percent, with 2012 forecast also down from 2.6 percent to 2.5 percent.
Without doubt many Manx businesses rely heavily on trade with the UK (whether of financial and other services or of physical goods) and so a growing UK economy is good news for the Manx Economy and conversely, a slowing in the growth forecast is not.
However Mr Osborne declared this a 'Budget for Growth' and so we need to look at the effect of the measures introduced for UK businesses.
A two percent cut in corporation tax will make a significant difference to larger corporates but finance is still not as available as it has been in the past and there is a distinct possibility that the tax cut will be used to reduce borrowing rather than stimulate investment.
For smaller business the effect of the cut in corporation tax will be largely down to the measure of the boost in confidence that it will bring and the Lloyds Banking Group business surveys will provide the answer there. I am sure that the move to provide three years' grace for new regulation will be welcomed.
The other point that may affect the Manx Government is the reduction in fuel duty and the scrapping of the planned four pence rise later in the year. However I suspect that the income lost would be small enough not to cause too much concern.
Our housing market has been slower this last 12 to 18 months and I know a number of people who are renting here that would like to buy when they manage to sell their properties in the UK. Whether the UK Government-backed shared equity scheme to help 10,000 first-time buyers, coupled with the new rules to require planners to prioritise growth, will be sufficient to stimulate the UK housing market remains to be seen."
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