Instant View - Reaction to 2012 budget

LONDON (Reuters) - Chancellor George Osborne unveiled his 2012 budget on Wednesday, announcing a cut in income taxes and the speeding up of cuts to corporate taxes, which he will fund with levies on banks and wealthy proper owners.

Following are reactions to the government's economic forecasts, business measures and new tax proposals:

VICKY REDWOOD, CAPITAL ECONOMICS

"The Chancellor's decision to hold back from any net giveaway was just as well given that this morning's public finances figures showed that borrowing this year is unlikely to undershoot the OBR's previous forecast by much, if at all.

"We continue to think that the OBR's growth forecasts look optimistic and that the government will soon start finding it rather harder to bring down borrowing. For now, though, the UK's safe-haven status looks secure."

HOWARD ARCHER, GLOBAL INSIGHT

"The new forecasts from the Office for Budget Responsibility (OBR) provide a rare recent luxury for a UK Chancellor with the growth forecasts being essentially unchanged.

"This is of welcome relief to the Chancellor and spares him having to tighten overall fiscal policy further.

"Having said that projected GDP growth of 0.8 percent in 2012 (revised up from 0.7 percent) is still worryingly weak and hardly a matter for celebration."

PHILIP SHAW, INVESTEC

"Nothing particularly dramatic. The GDP forecasts look reasonably similar to the autumn statement numbers, it's not a massive shift in the economy between November and March."

GEORGE BUCKLEY, DEUTSCHE BANK "Growth was revised up slightly for 2012 to 0.8 percent (from 0.7 percent) - while this is the first upward revision we have seen in quite some time (since 2009) it is clearly very modest."

BRIAN HILLIARD, SOCIETE GENERALE

"The headline grabber is the cut in income tax.?He said the higher rate didn't raise any extra money anyway, so economically he can justify it?but politically?I think it's a?bit of a gamble."

ROSS WALKER, RBS

"All very much as expected, barely any changes at all to the growth and borrowing numbers. It looks from a market point of view to be fairly neutral."

DOMINIC SWORDS, HENLEY BUSINESS SCHOOL

"Unwinding that 50p down to 45p will have a bigger cost to total tax than he is expecting. Clearly it's a political decision that he's taken to be seen as the champion of enterprise.

"The net effect of the economics of it is a Robin Hood who is taking from the very wealthy to give to the quite wealthy."

TOM ASTON, KPMG

"For the fourth time, banks are being hit with another increase in the bank levy.

"At a time where the more international focused banks are already outperforming UK focused ones, today's increase may prompt banks to again reassess the attractiveness of operating in the UK.

"If banks shrink their balance sheets then they will pay less bank levy, but typically at the same time they will be lending less to the economy."

SIMON DENHAM, CAPITAL SPREADS

"The banker bashing continues. Banks will be in the loser's camp as they will not benefit from the cut in corporation tax. An extraordinary manoeuvre when it's precisely them who we need to rely on to help boost credit to business and individuals."

BRITISH BANKERS ASSOCIATION

"The?change in bank levy was expected once the corporation tax cut had been announced. The change corrects what would otherwise be a shortfall in the bank levy, in order to raise the government's target of at least 2.5 billion pounds each year."

RUSSELL QUIRK, EMOOV.CO.UK

"Few parts of the Budget smacked of such naked tokenism as the new top rate of stamp duty.

"It may be a clever wheeze to mitigate the political fallout from the abolition of the 50p tax rate. But ultimately this ill-thought-out measure is just another tax on aspiration, and a levy on success."

TIM MARTIN, JD WETHERSPOON

"We are disappointed that excise duties on alcohol will increase by two per cent beyond the rate of inflation, since the British people?are now paying 40 per cent of all the alcohol duties in Europe.

"We are also very disappointed that pubs will continue to?pay 20 per cent VAT on food when supermarkets pay nothing, enabling them?to cross subsidise their prices for alcoholic drinks."

BOB CROW, RMT UNION

"The tinkering at the lower end of the tax scale will be swallowed up by increased utility bills and travel costs while the rich will just engage another army of accountants and lawyers to dodge the so-called clampdown on tax avoidance by inventing another barrage of scams."

ANDREW LEDGER, BARCLAYS

"Hopefully this will be the first step in putting Britain back on the map as a cost-effective destination for drama production. That should tempt more overseas production companies to shoot dramas here in the UK, just as we've seen happen in film."

JAMES LOWMAN, ASSOCIATION OF CONVENIENCE STORES

"Sunday Trading relaxation will present artificial growth in large stores and supermarkets paid for by loss of trade in local shops up and down the country."

(Reporting by Kate Holton and UK equities)

Source: http://news.yahoo.com/instant-view-responses-britains-2012-budget-125654631.html

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