UK’s Hammond sets target for cyclically-adjusted budget deficit

BREXIT will cause Britain’s economic growth to slow sharply and blow a hole in government finances that will require it to borrow an extra 122 billion pounds (US$151 billion) over five years, a gloomy budget update revealed yesterday.

Britain’s decision to exit from the European Union, or Brexit, following a referendum in June, means the United Kingdom will grow only 1.4 percent in 2017 and 1.7 percent in 2018, compared with forecasts in March for growth of 2.2 percent and 2.1 percent, respectively, Hammond said Wednesday. The big shocks came not from what he proposed but from Office for Budget Responsibility figures.

The OBR said its report was based on the assumption that Brexit would reduce Britain’s total potential output.

Most of George Osborne’s welfare savings will go ahead, however, with Hammond deciding the best way to help the Jams is through an economy that generates higher-paid jobs.

Public spending this year to be 40% of GDP – down from 45% in 2010.

Mr Vickers highlighted the expected rise in minimum wage from £7.20 to £7.50 as good news for low earners in the region.

This means it will create fewer jobs, there will be less money for pay rises, and there will be less profit for companies – all of which hits the government’s (and families’) bottom line.

A white rights terrorist was found guilty of the murder of British MP Jo Cox on Wednesday (23 November), who was assassinated in the run-up to the Brexit referendum in June.

And for those who have for years been calling for the Government to recognise the importance of science to the UK’s future, he announced an extra £2blln a year by 2020. As immigration tends to boost the economy, this contributes to a dip in GDP. Prime Minister Theresa May said she will trigger the process to depart the alliance by March next year.

A coalition of churches including Baptists Together, the Presbyterian Church of Scotland, the Methodist Church and the United Reform Church warned “big benefit cuts are coming”.

In the period until 2012, predictions show borrowing will be £122billion higher than forecast in March’s budget.

McDonnell concluded: “The plan to reset economic policy has been betrayed”.

Perhaps the worst kept secret of his Autumn Statement was the Chancellors view on fees imposed by lettings agents, which will be banned.

The BBC says the budget will now not be in surplus by the end of this parliament and there will be £122bn more borrowing in this parliament than had previously been expected.

Hammond also announced he is abolishing the Autumn Statement – insisting no other major economy makes hundreds of tax-and-spend changes every year.

“My #AutumnStatement today is focused on preparing & supporting the economy as we begin writing a new chapter in our country’s history”, he wrote on Twitter.