Report by Paul Crocker, Senior Investment Manager for IOMA Investment Management

As far as 2010 Budget expectations were concerned, the Isle of Man had similar needs to the UK and that was for a budget which would stimulate UK growth and reduce the fears of a credit downgrade.

A healthy UK benefits the Isle of Man and realistically probably also makes it feel less inclined to bully its neighbour.

One must also remember that if there is a run on Sterling and interest rates rocket, the consequences impact both jurisdictions.

However, with an election just weeks away, it was inevitable this opportunity would be lost and Mr Darling would simply try to buy votes.

The budget lacked the detail to boost confidence and within hours of the speech one rating agency expressed concern over the ongoing debt situation.  Both the gilt market and the currency have since weakened implying investors are still steadily  heading for the exit.

If Labour wins the election, there will be a summer spending review which will provide the detail we all actually needed on budget day.

A Conservative victory would result in most of the plans being thrown out the window.  However, with a hung parliament the most likely outcome, investors along with the rating agencies will become increasingly uneasy over the country’s predicament and its ability to address the debt issue.

It may have been a UK budget, but the people of the Isle of Man are caught with the consequences of the country’s mismanagement and Mr Darling did not do anywhere near enough to restore confidence.

The few pence on alcohol, tobacco and petrol announced on Budget day may be unwelcome but they could be the least of our worries in a few months time if we have a sterling crisis as a result of political apathy.