Two budgets in 2017 after last statement in autumn

Posted December 08, 2016

Hammond, the Chancellor of the Exchequer, also said the United Kingdom government would need to borrow billion of pounds more over the next five years to invest in infrastructure in order to offset the negative results of the Brexit vote.

Presenting the Autumn Statement, his first major economic statement since taking office in July, the chancellor explained that the Office of Budget Responsibility's latest figures expect growth to be 2.1 percent this year and 1.4 percent next year.

The government will invest 1.0-1.2 percent of GDP on economic infrastructure from 2020, up from 0.8 percent now, Hammond said.

"In view of the uncertainty facing the economy, and in the face of slower growth forecasts, we no longer seek to deliver a surplus in 2019/20", Hammond said.

To put his own stamp on the statement, Hammond introduced three new rules: for borrowing to be below 2% of GDP by the end of the parliament; for public sector net debt to be falling by the same time; and a monitored cap on welfare spending.

"Should economic growth indeed disappoint relative to the OBR's forecasts, it is of course inevitable that the budget deficit will fail to come down as quickly as hoped, which in turn hardly paints a rosy picture of the outlook for sterling", Buxton says. He noted that this is equivalent to the IMF's forecast for growth in Germany next year, and better than forecasts in Italy and France.

Britain's new Chancellor will borrow billions of pounds more money to build roads and instal lightening speed broadband as independent forecasters claim Britain's economy is poised to take a £60bn Brexit hit.

Britain is expected to run a budget deficit of almost £22 billion in the 2019/20 financial year which until recently had been the target date for a first budget surplus, Hammond said, citing forecasts from the budget office.

Delivering his first Autumn Statement, Hammond confirmed he is no longer seeking a budget surplus in 2019-20, as his predecessor, George Osborne, had pledged.

Prime Minister Theresa May has vowed to trigger Britain's exit from the European Union by the end of March by activating Article 50 of the EU's Lisbon treaty, which begins a two-year countdown to leaving the bloc.

Estate agents were also banned from charging letting fees in an attempt to ease pressure on families struggling to get on the housing ladder and forced to rent.

The National Living Wage will increase by 30p an hour to £7.50 for over-25s in April and fuel duty will be frozen, in a move that will save the average auto driver £130 a year.