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 property owners.

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

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 from those contained in last November's Autumn Statement and the projected public finance shortfalls trimmed for the next five years.

"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 "The numbers are not vastly different to what was expected and certainly not vastly different to what was announced just a few months ago.

"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.

"I'm a little bit surprised to see them lower the claimant count forecast, so they are a little bit more optimistic about employment and unemployment, which needs to be looked at."

ROSS WALKER, RBS

"All very much as expected, barely any changes at all to the growth and borrowing numbers.

"All very much as expected on the macro side (..) and thus far the micro policy changes are all very much as had been leaked. It looks from a market point of view to be fairly neutral."

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. With such a huge disparity in property prices across the UK, it will inevitably turn into a tax on London and the South East.

"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."

SUE FOXLEY, PROPERTY FIRM CLUTTONS

"London's global competitiveness relies on attracting the highest skilled professionals, whether from the UK or elsewhere in the world. The Mansion Tax would add to the already substantial costs for professionals choosing to work and raise families in London.

"This is bad news for London's long term economic prosperity and, therefore, the fortunes of the wider UK."

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."

COLIN MCLEAN, SVM ASSET MANAGEMENT

"I think the inflation targets for next year look credible, more so than the OBR forecasts for growth."

ANDREW LEDGER, BARCLAYS

"The TV industry has been crying out for tax credits for drama production for years.

"Hopefully this will be the first step in putting Britain back on the map as a cost-effective destination for drama production. That should tempting 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.

"The government is undertaking this measure without any consultation after twice rejecting the idea last year. This will cost small businesses more than 480 million pounds and wipes out any hopes local shops had for a sales boost from the Olympics."

RICHARD WILSON, TIGA

"Tax breaks for games production will ensure that the UK remains at the forefront of video game development. It will also help to rebalance the UK economy away from an over-reliance on financial services towards a high skill, R&D intensive and export focused industry."

(Reporting by Kate Holton and UK equities)

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

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