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Firms watch Baghdad not Brown

Investment house economists have been left unimpressed by Brown&#39s budget and are continuing to watch the news on Iraq to determine future changes in the world&#39s stockmarkets.
Pundits believe the budget will have little impact on share prices as all significant changes were flagged up in the pre budget review or leaked.

Framlington head of equity income, monthly income and high-income funds George Luckraft predicts the Chancellor&#39s &#39luck is about to run out&#39. He says: &#34Gordon Brown is not a very good mathematician. He&#39s just tinkered around the edges with flashy things like the child trust fund, which is going to be amazingly expensive.

Luckraft has slammed the Chancellor&#39s &#39overoptimistic&#39 figures for growth for 2003 revised to 2-2.5 per cent from 2.5 to 3 per cent. He believes the rise and fall of the FTSE is being largely determined by the changing situation in Iraq not by the Chancellor.
Luckraft says: &#34The markets might rally further when there is an ultimate solution in Iraq. There will be a temporary bounce but then the reality of the economy will hit in and we could see further depression.&#34

Gartmore head of strategic research Richard Urwin believes the Chancellor has kept growth predictions high in order to duck the issue of taxation and avoid damaging public confidence. He believes the future inevitably holds higher borrowing, taxation and larger gilt issues.

Urwin says: &#34 There were very few surprises in this budget and in terms of the grand scheme of things it will have little effect on the economy and the markets because we knew what he was going to announce. But what is important is that the over all shape implies this is a stimulative budget.&#34

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England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.

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