Spring Statement: Chancellor presents latest growth and borrowing forecasts

  • Spring Statement: Chancellor presents latest growth and borrowing forecasts

Spring Statement: Chancellor presents latest growth and borrowing forecasts

"And while the budget deficit looks likely to come in nearly £5 billion lower this year than we expected in November, the explanations for this imply smaller downward revisions for future years".

Ahead of the statement, unions called on Mr Hammond to prioritise funding for children with high needs.

And the Chancellor said borrowing was due to fall in every year of the forecast, with debt predicted at almost 1 per cent lower than in November.

John McDonnell, the shadow chancellor, gave a robust response to the speech, criticising the "indefensible spectacle" of a chancellor "failing to lift a finger" to help struggling local authorities and the NHS.

The chancellor said the economy was on track to grow a little faster than expected this year, despite the prospects for weaker growth in the medium term.

He will launch a number of consultations to report in time for the autumn Budget, including on the impact of VAT on small businesses and the use of the tax system to cut plastic waste.

On housing, the Chancellor said the Government was working with 44 authorities who have bid for a share of the £4.1 billion housing infrastructure fund.

Rain Newton-Smith, chief economist at the Confederation of British Industry, largely echoed Mr Marshall's remarks, saying that it was "great to see an upgrade in the state of our public finances and rightly sensible to set more aside for a rainy day with Brexit uncertainty still weighing on the economy".

Spring statement Philip Hammond
PAThe Chancellor indicated that tax and spending changes would come into effect in November

The Chancellor attempted to deliver a more upbeat statement amidst the uncertainty that surrounds the United Kingdom economy, pointing to signals for stronger growth and falling inflation.

The Chancellor talked up "substantial progress" on the Brexit talks so far and said he looks forward to "another important step forward next week at the European Council", when negotiating teams meet.

Speaking to MPs this lunchtime he said the Office for Budget Responsibility had revised economic growth for 2018 up from 1.4 per cent to 1.5 per cent.

In the table, you can see inflation predictions from the Spring Statement alongside forecasts from the Autumn Budget.

The new forecasts for net borrowing as a percentage of GDP are 1.8% for 2018/19, 1.6% for 2019/20, 1.3% for 2020/21, 1.1% for 2021/22 and 0.9% for 2022/23.

Hammond's Treasury deputy Liz Truss said there would be "no red box, no rabbits out of the hat and no tax changes".

He also said the government was considering new taxes on single-use plastic and on the profits of tech giants like Facebook and Google.