Philip Hammond reveals economy is growing faster than forecasters predicted and claims we are at ‘turning point in the nation’s recovery’
PHILIP Hammond revealed during the Spring Statement that the UK’s economy is again growing faster than forecasters predicted.
The Chancellor claimed we are at a “turning point in the nation's recovery” as he announced the economy grew by 1.7 per cent in 2017, compared to the 1.5 per cent forecast at the Budget in November.
He also said the debt forecast is coming down, and by the end of the Parliament will have fallen significantly, saying that there is now “light at the end of the tunnel”.
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.
He said it will remain unchanged at 1.3 per cent in 2019 and 2020, before picking up to 1.4 per cent in 2021 and 1.5 per cent in 2022.
And the Chancellor said borrowing was due to fall in every year of the forecast, with debt predicted at nearly 1 per cent lower than in November.
Borrowing is now forecast to be £45.2billion this year, £4.7billion lower than forecast in November.
The OBR predict that debt as a share of GDP will peak at 85.6 per cent in 2017-18 then fall to 85.5 per cent in 2018-19, then 85.1 per cent, 82.1 per cent the year after, 78.3 per cent in 2022, and finally 77.9 per cent in 2022-23.
Mr Hammond said it is expected to be "the first sustained fall in debt for 17 years, a turning point in the nation's recovery from the financial crisis of a decade ago".
In the Spring Statement, Philip Hammond announced:
- The UK economy is growing faster than expected, with growth of 1.5 per cent forecast for 2018
- National debt is about to start falling as a share of the economy as the Government no longer borrows cash for day-to-day spending
- The economic gains will allow him to increase spending later this year
- Average wages will finally begin to rise above inflation by the autumn
- Ministers will consult on a new litter tax and provide relief for small firms
- Tech giants could face tax changes which will see them finally paying their fare share
But he did admit that the UK’s debt remains too high, equal to around £65,000 per household.
Mr Hammond said this makes the economy vulnerable to future shocks and places “a significant burden on future generations”.
Even despite the falls in debt in the past few years the interest payments on what the nation owes is around £50billion each year – more than the amount spent on the police and armed forces combined.
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It was revealed that the Chancellor told Cabinet during their meeting earlier today that the slightly stronger productivity growth seen over the last two quarters was the key to increasing wages.
Theresa May’s spokesman said Mr Hammond claimed there was still work to be done, but the Government would always take a balanced approach to reducing the debt, investing in public services and keeping taxes low.
In his speech today he said there had been "solid progress towards building an economy that works for everyone" with growth every year since 2010.
And he accused Labour of "relentlessly talking Britain down" with "doom and gloom about the state of the nation".