Philip Hammond has said the Brexit vote underlined the "urgent" need to tackle the UK economy's long-term weaknesses as the Budget watchdog slashed growth forecasts for next year. The Chancellor, delivering his first and last Autumn Statement, said the economy had so far "confounded commentators" with its "strength and resilience".
Growth forecasts
But he revealed the Office for Budget Responsibility had downgraded growth forecasts for next year from 2.2% to 1.4% as a result of the uncertainty caused by the Brexit vote and higher inflation due to the fall in sterling.
Mr Hammond told MPs: "That's slower, of course, than we would wish, but still equivalent to the IMF's forecast for Germany, and higher than the forecast for growth in many of our European neighbours, including France and Italy."
The Chancellor said the June 23 vote to leave the European Union will "change the course of Britain's history" and "makes more urgent than ever the need to tackle our economy's long-term weaknesses" including the productivity gap.
Borrowing and investment
Public sector net borrowing to fall from 4% of GDP last year to 3.5% this year continuing to fall and reaching 0.7% in 2021/22.
Mr Hammond told MPs Government borrowing would hit £68.2 billion this year and £59 billion next year compared with the March forecast of £55.5 billion and £38.8 billion.
Additional borrowing of £23 billion over the next five years is to be used to invest in infrastructure and innovation to raise UK productivity.
A new £2.3 billion Housing Infrastructure Fund will deliver infrastructure for up to 100,000 new homes in high demand areas and £1.4 billion will be made available to deliver 40,000 additional affordable homes.
Additional investment in research and development will see a rise to an extra £2 billion per year by 2020/21.
There will be an extra £1.1 billion investment in English local transport, including pinch points on strategic roads, digital signalling on railways and low emission and autonomous vehicles.
Debt forecasts
The Chancellor also warned that debt would continue to rise as a result of a weak economic outlook, rising from 82.6% to 87.3% by the end of 2017.
Due to the Government's softening approach to eradicating the deficit - which will not be completed now until the next Parliament - debt will peak in 2017-18 at 90.2% of national income, before falling again in 2019 to 89.7%.
Data from the OBR also showed that public sector net debt is forecast to hit £1.945 trillion by 2020. It predicts it will hit £1.952 trillion by 2021/2022. This means that by the end of parliament national debt will have increased by £220bn.
Source: Telegraph
Nenhum comentário:
Postar um comentário