March 23, 2018

Philip Hammond upbeat on growth and spending in spring statement

13 March 2018, 06:35 | Melvin Schneider

SPRING STATEMENTMarch 12 2018 12:00pm The Times Spring statement Chancellor will get stuck into chewing gumnew Oliver Wright Policy Editor

SPRING STATEMENTMarch 12 2018 12:00pm The Times Spring statement Chancellor will get stuck into chewing gumnew Oliver Wright Policy Editor

Borrowing is now forecast to be £45.2 billion this year, £4.7 billion lower than forecast in November.

The Chancellor of the Exchequer Philip Hammond has delivered the Spring Statement for 2018, announcing a consultation on taxing plastic waste and encouraging digital payments.

The OBR has released a statement explaining its revised forecasts for United Kingdom economic growth.

Mr Hammond rejected Labour "doom and gloom" over the state of the economy, saying the recession repeatedly forecast by shadow chancellor John McDonnell since 2010 had failed to materialise.

"The economy has slightly more momentum in the near term, thanks to the unexpected strength of the world economy, but there seems little reason to change our view of its medium-term growth potential", it said.

Hammond said the education secretary will release up to £80m to help small firms take on apprentices.

Green groups, industry bodies and individuals are invited to submit evidence on how the government can use the tax system to curb the use of plastic.

On housing, he said there is an investment programme of £44bn.

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Sarah Hewin, chief economist for Europe at Standard Chartered, said the latest forecasts announced by Hammond looked sub-par:"The surprise for many people is how little has's a pretty weak trajectory".

In November, the GDP growth forecast for the next five years, up to and including 2022, was 1.4%, 1.3%, 1.3%, 1.5% and 1.6% respectively.

He said "substantial progress" has been made in Brexit talks.

Philip Hammond has said there is "light at the end of the tunnel" for the United Kingdom economy, with the government's official forecaster upgrading short-term growth projections and predicting falls in inflation, debt and borrowing - but warning of the growing impact from Brexit in future years. Nonetheless the upgrade remains good news - as does the 1.3 per cent growth for 2019/20 which remains unchanged, indicating that the prospect of Brexit is no worse than forecasters last thought it was.

Inflation hit 3.1% in November 2017, but the OBR predicted it had reached its peak.

The OBR has already upgraded its fiscal forecasts twice over the a year ago, in March 2017 and November, as tax receipts have come in stronger than previously expected.

The Office for Budget Responsibility's forecasts for the deficit, debt, GDP and productivity will form the backbone of the statement.

Although there were no announcements on any major new policies, Hammond said that the government was on track to meet its building targets for new homes.

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