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Budget needs growth policy to boost investment

George Osborne Podium 480

Investment experts have called on Chancellor George Osborne to use the upcoming Budget to come up with a plan to stimulate growth and consolidate child trust funds and junior Isas.

OPM chief investment officer Tony Yousefian says following the downgrade of the UK’s AAA rating from Moody’s, the chancellor has an opportunity to create a growth policy alongside his plans to reduce the deficit.

He says: “The growth policies need to be aimed at small and medium sized enterprises. We need to rekindle the animal spirit in boards and directors, and encourage them to take more risk. Hopefully this will mean boards will be able to loosen their purse strings, bringing with it reinvestment and growth.”

Hargreaves Lansdown senior investment manager Adrian Lowcock says combining trust funds and Jisas would be a welcome move following news about higher child trust fund charges.

He says: “We have been campaigning for greater clarity around the distinction between child trust funds and Jisas. Consolidating the two would free up all those investments, so that investors can pick the best option on the market.”

Lowcock is also hoping the Budget will give the green light to expanding the list of qualifying investments for stocks and shares Isas to shares traded on the Alternative Investment Market.

He says: “In the last Budget Osborne alluded to allowing Aim shares back into Isas, which would tidy up a rule that is looking a bit dated. Investors can now access much riskier products and Aim shares are being left out in the cold.”

But Rathbones head of multi-asset investment David Coombs is less optimistic about whether the Budget will deliver benefits for the investment sector.

He says: “I cannot see there is going to be anything of any significance in the Budget on investment.

“There will be one or two headline-grabbing announcements with an emphasis on capital spending, and perhaps an infrastructure project. But I am not expecting this Budget to be a game changer.”

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