In his first spring Budget speech before the House of Commons, UK Chancellor Phillip Hammond sharply raised his growth forecast for the UK for 2017, expecting 2.00% growth and 2.4% inflation, compared to the previous November forecast of 1.40% and 2.3% respectively, while modestly cutting outer years until the two projections catch up again in 2021, adding that the UK had “confounded commentators with robust growth.”
A summary of forecasts is as follows:
The budget deficit is revised as follows:
Inflation was likewise revised modestly higher early on, then drifting lower in the outer years:
Hammond also said that the UK’s borrowing bill would drop from 3.8% in 2016 to 2.6% in 2017 and then fall again to 1.9%.
Overall debt to GDP is expected to peak at 88.8% next year, 1.4% lower than the previous forecast in November, with the longer forecasts roughly unchanged.
Promising that “we will not saddle our children with ever increasing debt”, the chancellor said his fiscal plans would achieve a reduction in the deficit while preserving fiscal stability.