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The Autumn Budget, a fiscal policy update from the Chancellor of the Exchequer, was delivered earlier today (26 November). The Office for Budget Responsibility (OBR) actually published key details early in an unexpected twist. But the full speech highlighted changes to taxation and spending that will impact stocks. In my initial take, here’s one stock that could do well, with one that could struggle from the changes.
More careful spending
A stock that could do well is Unilever (LSE:ULVR). The consumer staples giant owns many household brands we all shop for weekly. Over the past year, the share price is down by 3%.
In the Budget, millions are set for a wage increase due to the boost to the minimum wage and the national living wage. Further, the benefit cap on those with more than two children is set to end. This will provide more money for large families on benefits. At the same time, the income tax thresholds have been frozen. So people might pay more tax if their salaries push them into a higher threshold.
In my view, this means some people will get paid more, but will be more careful about how they spend it. As a result, I see people cutting back on luxury products and turning to staples sold by Unilever.
The company’s H1 2025 underlying sales grew by 3.4%, which I think highlights how people in the UK (and around the globe) have already been spending more on Unilever products as they have felt finances tighten. I believe this trend will pick up over the coming year.
One risk is that Europe only accounts for 19% of overall revenue. So even if the UK division does outperform, it might not really be able to make a significant improvement for the overall group.
Concern for homebuilders
One loser from all of this could be Persimmon (LSE:PSN). The homebuilder stock is up 1% over the past year, but is the largest faller so far today in the FTSE 100, down 4%.
The Budget didn’t provide any mortgage guarantee extensions, stamp duty relief, or other tax incentives for first-time buyers. This clearly surprised some investors. Further, owners of properties valued at over £2m will now face a higher annual surcharge of £2.5k, which has been referred to as a ‘mansion tax’.
As a result, homebuilders like Persimmon could see lower demand for property. Given changes to personal taxation, people might be more cautious about making significant commitments, such as a house purchase. On top of this, the lack of any added incentives to help the property market could cause more people to put their plans on hold.
Of course, some measures won’t take effect straight away. For example, the mansion tax starts in 2028. Persimmon has a strong order book, so any slowdown in demand is unlikely to affect financial results anytime soon. In fact, during a trading update from early this month, the business noted a 15% increase in the forward sales position.
Ultimately, I think the news today could put a cloud over the stock.
