Chancellor unveils higher growth forecasts in Spring Statement

Chancellor unveils higher growth forecasts in Spring Statement

Philip Hammond delivered the strongest hint yet that he is ready to draw a line under austerity as he unveiled higher growth forecasts and lower government borrowing.

Delivering his Spring Statement, the Chancellor seized on good news on the economy and tax revenues to insist there is ‘light at the end of the tunnel’ for the UK.

Mr Hammond confirmed that the government’s day-to-day spending is finally heading back in the black after a decade of belt-tightening following the credit crunch.

And he said he is ready to loosen the purse-strings to bolster key public services in the Autumn Budget if the finances remain on track – with up to £15billion available.

Delivering his Spring Statement, the Chancellor seized on good news on the economy and tax revenues to set out an optimistic vision for the UK’s future

The independent OBR has upgrade its economic forecasts for the UK economy next year

Mr Hammond told MPs the government was finally hitting its target for wiping out the deficit

For the first time in decades the Spring event was not a full fiscal package – as the Budget has been moved to the end of the year.

Instead Mr Hammond gave a 25-minute update to Parliament on the economy and public finances.

In a highly political intervention that drew sharp dividing lines with Labour, Mr Hammond: 

  • Condemned Labour’s ‘doom and gloom’ about the economy, and made fun of his own ‘Eeyore’ reputation on Brexit saying he was at his most ‘Tigger-like’. 
  • Pointed out that manufacturing was enjoying its strongest run for 50 years and the government had achieved the first sustained fall in debt for 17 years. 
  • Highlighted the resilience of the economy amid uncertainty about Brexit negotiations and said the deficit reduction target will be reached this year. 
  • Suggested he is ready to pump more money into key services at the Budget in November as long as the prospects of UK plc do not take a turn for the worse. 
  • Announced consultations on cracking down on single use plastics and an overhaul of the VAT system to benefit small businesses.

The Chancellor said he had been struck by the resilience of the UK economy since the EU referendum.

Mr Hammond said the government was making ‘solid progress towards building an economy that works for everyone’ with growth every year since 2010. 

He accused Labour of ‘relentlessly talking Britain down’ with ‘doom and gloom about the state of the nation’. 

Last November, a hole was knocked in Mr Hammond’s plans when the Office for Budget Responsibility slashed its predictions for growth.

But today the OBR upgraded its estimates for growth this year from 1.4 per cent to 1.5 per cent.

The OBR figures from the Spring Statement show that the deficit will shrink faster than previous expected. These figures show the overall balance of government spending – including capital projects – rather than the government’s target of the cyclically current deficit 

Philip Hammond (pictured leaving Downing Street today) said Britain’s economy is set to confound the sceptics during Brexit

The figures for next year and 2020 are unchanged since the November Budget at 1.3 per cent. 

But the estimates were trimmed from 1.5 per cent to 1.4 per cent in 2021, and by 0.1 per cent to 1.5 per cent in 2022.

Mr Hammond said borrowing was due to fall in every year of the forecast. 

Debt is forecast to fall as a share of GDP from 2018-19 and the OBR has revised down debt and borrowing in every year. 

What was in Philip Hammond’s 2018 Spring Statement?

Philip Hammond today outlines his Spring statement to MPs 

Britain’s finances are improving:

Borrowing is due to fall in every year of the forecast.

Debt is forecast to fall as a share of GDP from 2018-19 and the OBR has revised down debt and borrowing in every year. 

Education 

£80million to fund apprenticeships at small businesses 

Housing:

Philip Hammond said the Government would tackle the housing crisis, announcing an extra 215,000 homes will be built in the West Midlands  by 2031.

In London 116,000 affordable homes will be built by the end of 2022. 

Transport: 

Mr Hammond said he was inviting cities across England to bid for a share of £840 million to deliver on ‘local transport priorities’. 

Austerity:

Mr Hammond did not announce any major new spending, but hinted he would turn the spending taps on at November’s Budget if Britain’s finances continue to do well.

Business:

The next revaluation for business rates has been brought forward to 2021, after which the Government will move to revaluations every

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