UK Budget 2017: Chancellor Philip Hammond Downgrades Post-Brexit Economic Forecasts

UK Chancellor Philip Hammond downgraded the country's economic forecast in the country first autumn budget in 21 years.

Speaking in the House of Commons on Wednesday (22 November), Hammond said the UK economy is now expected to grow by 1.5% in 2017, revised down from the 2% forecast made in March.

Economic growth has also been cut to 1.4% in 2018, 1.3% in both 2019 and 2020. However, the Chancellor said growth would subsequently pick up back to 1.5%, and finally 1.6% in 2022, according to independent assessment by the Office for Budget Responsibility (OBR).

Borrowing is forecast to be £49.9bn this year, around £8.4bn lower than Hammond's forecast at the Spring Budget.

The Chancellor said borrowing will fall in every year of the forecast from £39.5bn in 2018 to £25.6bn in 2022-23, to reach its lowest level in 20 years.

Hammond added that the latest macroeconomic evidence suggests his previous commitment to cutting the deficit to under 2% by 2020-21 would be met, with the UK's debt, as percentage of GDP, expected to fall from 2.4% this year to 1.9% in 2018.

The OBR forecasts the deficit to be 1.3% of GDP in 2020-21, giving £14.8bn of headroom against the 2% target, the Chancellor noted further.

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