The uk government lowers its growth forecast. GDP is now expected to increase 2.1 per cent this year and 1.4% next year, compared with 2.0 and 2.2 per cent in the spring. For 2018 is reduced the forecast to 1.7 from 2.1 per cent. This was announced by Britain’s finance minister Philip Hammond on Wednesday, according to Bloomberg News, in the context of the government’s “Autumn Statement”, which presents the guidelines for the public finances. The forecast made by the budgetkontoret OBR.
He said that the british economy has shown an astonishing resilience since the Brexit vote, which means that the Uk must manage the imbalances, weaknesses in the housing market and low productivity.
Monetary policy has at the same time had a supportive role, with the Bank of England’s measures.
He also said that the government will continue to commit itself to maintaining fiscal discipline, but that there is a need of investment. The task now is to make the economy resilient when the Uk leaves the EU.
For the coming financial year predicted a deficit of 68.2 million billion pounds and for 2017/2018 is expected to a deficit of 59,0 billion pounds. In the spring was predicted to have a deficit on the 55,5, and 38.8 billion pounds.
The long-term forecast shows a deficit of eur 21.9 billion pounds in the year 2019/2020. Previously expected a series of years of deficit turned to a surplus for the financial year 2019/2020 of just over £ 10 billion.
the Total is thus expected borrowing to increase by 122 billion pounds in the coming five-year period, compared with the previous forecast.
Philip Hammond said that they are aiming to reach a surplus as soon as it is possible during the next parliamentary term.
the Investments in innovation in high value-added is to be financed through new borrowings, while the other increased expenditure is to be financed with tax increases or savings.
the Government should give priority to investment and innovation in their budget plans. A national fund for increased productivity shall be established with funds of £ 23 billion. At the same time, 2.3 billion pounds spent on housing investment and 1.1 billion pounds in the transport system.
central government Debt share of GDP (underlying) is expected to peak at 82,4 per cent of GDP. Overall, the expected net debt to peak at 90,2% of GDP in 2017/2018 (previous forecast amounted to 81.3). This after a reclassification of the Bank of England’s stimulus measures, which increase the debt-to-share. Towards the end of the forecast period, the share is expected to fall.
IN the EUROPEAN commission’s latest forecast in november was a british GDP growth at 1.9 percent this year and 1.0 percent next year.
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