A budget for 'makers, doers and savers'

A busy day on the markets saw a largely well received budget delivered hot on the heels of a better than expected UK employment report and then a surprise from the Federal Reserve in the US.

Chancellor George Osborne presented his latest budget, now just over a year ahead of the June 2015 general election.

Osborne claimed that "The government is on your side [...] We are taking the next steps on the economic plans. This is a budget for makers, for doers and for savers."

Among the headlines:-

- Cash ISA’s and stocks ISAs will be merged to create a single NISA (New ISA) with the annual limit raised to £15,000;
- Junior ISA’s annual limit was lifted to £4,000;
- A new pensioner bond was launched paying market rates of interest;
- The basic personal allowance to rise to £10,500 next year with the higher rate threshold rising to £41,865;
- The proposed fuel duty rise in September was scrapped.

On a more technical level, Osborne also announced £7 billion package to cut energy bills for manufacturers; £150 million is now available to help self-builds and the ‘Help to Buy’ scheme was extended to 2020 with a new garden city planned at Ebbsfleet, Kent.

Earlier, the UK unemployment rate remained unchanged in the three months to January at 7.2% according to the latest report from the Office for National Statistics (ONS) with the claimant count falling by 34,600.

The pound enjoyed its strongest day of the week on the back of yesterday’s events rising strongly against the majority of the 16 most actively traded currencies in the market.

Overnight, the US dollar rallied against its major peers after new Federal Reserve Chair Janet Yellen indicated the potential for an interest rate hike by the middle of 2015, far earlier than had previously been expected. In addition, the new economic outlook released by the Fed showed that the federal funds rate is expected to rise faster than anticipated once they do begin to increase with a 1% rate now forecast by the end of 2015.