Today’s Budget focused on the immediate issues facing British households and the UK economy with a raft of announcements to support small businesses.
Whilst many of these will not affect listed investments directly, the tone is supportive of an entrepreneurial spirit.
Combined with the Bank of England's interest rate cuts, British smaller companies could be well placed for a resurgent economy later on in the year.
Personal taxation barely featured in the Budget and opportunities to address pensions and income tax allowance were shelved with the exception of the Junior Isa allowance, which has been more than doubled.
For those who can afford to put £9,000 into a Junior Isa this is a truly life changing sum of money which can be invested and used to support your children or grandchildren getting on the housing ladder, paying for university education, it also means there is a potential for a new generation who can get into savers.
Infrastructure spending was a big part of this Budget and has been well flagged since the general election. The total package of infrastructure spending for this parliament is expected to reach £600bn over.
This is a colossal investment and importantly by investing in the UK is expected to boost productivity by 2.5 per cent.
Infrastructure investment is a traditional way for governments to boost the economy as the money invested filters down into the economy passing into businesses, employs and households where it gets recycled by consumers going out to spend.
The UK is unlikely to be alone with its infrastructure plans as central banks have been vocal and consistent in their view monetary policy needs to be supported by fiscal policy. The investments opportunities will be broad from construction companies, engineering businesses to support services and through the supply chains.
In the UK many of these companies are outside the FTSE 100 and material supplies and housebuilders feature more in the FTSE 250.
Once the coronavirus issue is addressed the UK mid and smaller companies may well see a significant boost as all the policies from today begin to feed through and the economy recovers from the recent shock.
Adrian Lowcock is head of personal investing at Willis Owen
