Chancellor Philip Hammond delivered his Spring Statement 2018 yesterday (13 March) in line with his promise to move away from two major fiscal announcements every year.
There was no red briefcase, no red book, no spending increases and no tax changes as the Chancellor announced updated economic forecasts in a speech lasting less than half the time of any of his previous statements.
Hammond further rang the changes by moving his speech to a Tuesday, rather than its usual slot immediately after Prime Minister’s questions on a Wednesday.
Far from being a second financial statement of the tax year, the Chancellor unveiled the latest economic forecasts alongside a raft of consultations.
Read our summary below.
Summary of forecasts:
- The Office for Budget Responsibility (OBR) revised its forecast for growth up to 1.5% - up 0.1% on the previous forecast announced in Autumn Budget 2017.
- However, GDP is expected to fall back to 1.3% in 2019 and 2020 as the OBR left its November 2017 forecast unchanged.
- Borrowing fell to £45.2 billion in 2017/18 – £4.7 billion lower than the OBR’s forecast in November 2017, while Hammond confirmed any further borrowing is expected to fund capital investment only.
- Debt is expected to start falling as a share of GDP in 2018/19, according to the OBR.
Aside from updated economic forecasts, the rest of the Chancellor’s attention focused on policy consultations – some new, others previously announced.
These consultations may feed into Autumn Budget 2018.
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