Rolling coverage as chancellor Philip Hammond reveals new growth and borrowing forecasts, as Brexit crisis rages in parliament
- Introduction: Chancellor’s spring statement at 12.30pm
- 2019 growth forecast may be cut
- More money for period poverty and knife crime expected
- Consumers to get more power over tech giants
- Politics Live: MPs to vote on no-deal today
Rupert Harrison of investment giant Blackrock (and a former chief of staff for George Osborne) says the spring statement forecasts don’t mean very much.
Harrison told Sky News that they’re effectively ‘fantasy forecasts’, due to Brexit uncertainty.
If we do get a no-deal Brexit, Philip Hammond will be spending a lot more money on emergency measures.
If we get some lifting of the uncertainty, I think there will be more money for public services.
This is an opportunity to send a strong and supportive message to businesses at this very tricky time, even though there’s a limit to what he can do.
City investors are more concerned by the Brexit mess than the chancellor’s statement.
They’ll still be watching at 12.30pm, though, to hear the latest growth and borrowing forecasts.
Of particular importance will be the latest forecasts for economic growth and public finances.
It’s expected the former is to be revised down considerably bearing in mind the Organisation for Economic Co-operation and Development (OECD) recently reduced their forecast for 2019 economic growth for the UK down to just 0.8%, well below the Office for Budget Responsibility’s (OBR) previous prediction of 1.6%.
Nevertheless, based on January data the government’s tax income is likely to have worked some way towards reducing the budget deficit.
Economic growth remains woefully subdued, at about 0.2% last month, which will make it less likely for the Chancellor to end austerity measures. This would normally be a negative for the pound but a no-deal Brexit vote will trump that.
With so much political uncertainty at present it’s difficult to see how he could possibly commit to any large scale spending plans or initiatives at this point in time.
Indeed, it may well be best for the Chancellor to simply stand-up and say at this stage he has nothing to say. At the very least he must be relieved the Spring Statement is now just that and no longer a full blown March Budget.