Tuesday, 13 March 2018 12:23

Spring Statement: Chancellor says GDP higher in 2018

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The Chancellor has announced that UK GDP growth should reach 1.5% in 2018, higher than the 1.4% predicted in his autumn budget.

In the first of his new Spring Statements, Phillip Hammond said there were many reasons to be positive about the UK’s financial position.

He said he was planning to keep taxes low and invest for the future to create an economy “that works for everyone”.

He said that “we will continue to prepare for all eventualities” regarding Brexit.

The OBR forecast today there would be growth 1.5% for the economy for this year. He point out that the OBR also forecasts more jobs growth and he said manufacturing was having its best time for many years. Inflation is expected to decline from 3% towards 2% and real wage growth is expected to return this year, he predicted.

The forecast GDP growth is unchanged at 1.3% for 2019 and 2020 – before picking up to 1.4% in in 2021 and 1.5% in 2022.

Borrowing is forecast to be £45.2 billion this year – £4.7 billion lower than forecast last November.

Mr Hammond said he had even higher hopes, saying “forecasts are there to be beaten”, while adding: “Our remarkable jobs story is set to continue”.

He reported that the UK economy has grown in every year since 2010, with the manufacturing sector enjoying its longest unbroken run of growth for 50 years. There are 3 million more people in jobs since 2010, he added.

He also said that over £1.5 billion will be put towards Brexit preparation, with funding for 2018-19 allocated as announced at Autumn Budget 2017.

He rejected the “doom and gloom” of the opposition benches and said that predictions from the Shadow Chancellor of a recession have been wrong.

The Government has cut taxes for 31 million working people by raising the personal allowance, he said.

He said: “I’m at my most positively Tigger-like today as I contemplate the future as a country with unique strengths.”

He pointed to law, language and financial services in London as among these.

He said today’s Spring Statement brings the UK into line with other countries of having a single fiscal event annually to give greater certainty to businesses.

 

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Last modified on Tuesday, 13 March 2018 17:08
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