Key Points
The Autumn Statement 2016, delivered by Chancellor Phillip Hammond, was wrapped up in the usual ribbon of positivity. However, it is likely that the economy still faces a rocky road with lots of hard work. What new forecasts are now being worked towards?
From now on it’s upside down
The first unexpected announcement in the Autumn Statement was, that this will be the last Autumn Statement. It has been scrapped…
Instead there will be a Spring Statement and the Budget will be in Autumn, as from next year.
This is to enable great scrutiny of the budget ahead of implementation.
An “economy for everyone”
“Britain will be the fastest growing major economy this year” reports Mr Hammond in his opening address. The IMF have backed this notion as they comment on the resilience of the UK economy following the country’s decision to leave the EU.
Whilst there are still long-term weaknesses that need to be tackled, Mr Hammond relays the message that he is focused on preparing an economy “for everyone …as we write a new chapter in the country’s history”.
UK GDP growth forecast
Source: Office for Budget Responsibility (OBR)
This chart above shows new forecasts for GDP growth to 2020. In 2017, which is just on our doorsteps, the government are expecting a slow-down to 1.4 percent, due to lower investment and weaker consumer demand.
Growth is then expected to rise again steadily from 2018 to 2020, finishing up just under figures previously forecast in March 2016’s Budget report.
Whilst it is no longer a key objective to deliver a surplus by 2020, the Chancellor reaffirmed his commitment to “return the UK finances to balance, as soon as practically possible.”
The key focus is now on supporting the economy through the up-and-coming changes.
UK borrowing forecast
Source: Office for Budget Responsibility (OBR)
The chart above shows government borrowing forecasts, which are greater than previous targets set by former Chancellor George Osborne.
However, Chancellor Phillip Hammond is working towards a borrowing figure in 2020 that would still be the lowest in two decades.
The Efficiency Review will deliver £3.5billion savings
The Efficiency Review announced at the Budget in March 2016, must be delivered in full, communicates Mr Hammond.
This will provide £3.5billion os savings.
Good, effective government spending will create these savings and at least £1billion is now promised to “priority areas” in 2019/20.
What other measures will the government now take to achieve the results they hope to regarding the UK Economy?
Read more here.
Before you go…
Don’t forget to download our FREE Autumn Statement Summary Guide.
COMING FRIDAY 25TH NOVEMBER