Published: Wed, March 14, 2018
Markets | By Josh Butler

Britain sees better than expected growth in 2018

Britain sees better than expected growth in 2018

The UK GDP is set to grow 1.5 per cent between 2018 and 2019, up from 1.4 per cent from previous estimates.

The predictions, made by Office for Budget Responsibility, would put the United Kingdom among the slowest among major economies as global growth picks ups, and are also drastically more pessimistic than those from before the Brexit referendum.

Hammond said the more favourable outlook for borrowing means the debt forecast is almost 1% lower than in November.

Britain's economy will grow slightly more than expected this year, finance minister Philip Hammond said Tuesday, but is expected to slow thereafter ahead of the country's European Union divorce.

Since he became chancellor in the summer of 2016, Hammond has sought to improve the UK's productivity record through a range of measures including higher infrastructure spending, extra investment in research and development and a greater emphasis on vocational training.

"However, much of this was anticipated and it is still fairly cautious with only a modest upward revision to growth of 0.1 per cent to 1.5 per cent this year".

Despite revealing the smallest budget deficit since 2002, Mr Hammond had already said the national debt was too high and that it would be wrong to put "every penny" into more public spending.

The chancellor used his 2018 Spring Statement to provide an update on policies aimed at tackling Britain's housing crisis.

The Government is expected to borrow £45.2billion this year - almost £5billion less than previously forecast, allowing ministers to spend more without breaking the bank.

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LONDON, March 13 (Reuters) - Britain's sluggish economy is heading for more weak growth over the next five years, according to official forecasts announced by finance minister Philip Hammond on Tuesday as the country heads for Brexit.

This marks "a turning point in the nation's recovery from the financial crisis of a decade ago" and there is now "light at the end of the tunnel", he said.

But, Labour accused Mr Hammond of "complacency" and a "missed opportunity" to ease pressures on public services, while the Government's independent forecaster played down suggestions of a major improvement in the public finances.

He also looked on course to meet another target to cut the budget deficit, adjusted for the swings of the economic cycle, to 2 percent of GDP by the 2020/21 financial year.

And Mr Hammond confirmed Britain no longer needs to borrow cash to fund day-to-day spending - instead, all money borrowed now goes on capital spending which has a long-term payoff.

Ian Stewart, chief economist at Deloitte, said: "These forecasts put the United Kingdom in a better position to face the moment of truth on Brexit".

He said "substantial progress" has been made in Brexit talks.

"But we've got to make absolutely sure it isn't the shadow chancellor's train, hurtling out of control in the other direction, towards Labour's next economic trainwreck".

He told the BBC: "The growth forecasts are about 1.5% growth each year for the next few years which is better than forecasting a recession, but it's an terrible lot worse than you might reasonably expect".

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