United Kingdom cuts growth forecast for 2019 - Hammond

United Kingdom cuts growth forecast for 2019 - Hammond

Mr Johnson's analysis said that although Philip Hammond's Spring Statement was not expected to be a big fiscal event, "by once again declining to set totals for the forthcoming spending review, [Mr Hammond] deferred making some of the biggest non-Brexit decisions of the parliament".

Philip Hammond referred to the British economy as "remarkably robust" during today's Spring Statement.

Hammond added that the United Kingdom economy was expected to grow by 1.4 percent in 2020, unchanged from the government's October forecast.

The IFS said the United Kingdom economy would have been about 2% bigger without the Brexit vote.

But the OBR also warned that a disorderly no-deal would pose a risk to the predicted growth rates, as the numbers are based on an assumed scenario in which the United Kingdom leaves the European Union with a deal on March 29, and enters a transition period.

Parliament last night rejected Prime Minister Theresa May's proposed Brexit plan for a second time, little more than two weeks before the scheduled date of departure from the EU.

"Leaving with no deal would mean significant disruption in the short and medium term and a smaller, less prosperous economy in the long term, than if we leave with a deal", Hammond told parliament, warning of higher unemployment and prices and lower wages under a no-deal Brexit.

Global growth is slowing, but United Kingdom wages are rising at their highest rate for a decade, amid record job creation.

MPs were expected to vote later today against a no-deal Brexit and then vote on Thursday in favour of the government seeking a delay to Britain's departure, now scheduled for March 29.

The figures were prepared for Hammond by the Office for Budget Responsibility.

He said that it was "disappointing" that the chancellor had missed the opportunity to provide desperately-needed funding for local services, and added that Brexit can not be a distraction from the challenges facing our public services.

Mr Hammond said he now had £26.6 billion of fiscal "headroom" that he has earmarked as a potential war chest for helping Britain's economy - for example, via extra spending or tax cuts - up from a previous estimate of £15.4 billion.

IFS director Paul Johnson noted that Brexit and its unknown outcome had seen Hammond hold back on significant spending announcements based on better-than-expected tax revenue.

Speaking at the Institute for Government, OBR chairman Robert Chote said that even with a deal there could be further uncertainty relating to Brexit.



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