UK raises growth forecast for 2019 Brexit year
LONDON: Britain’s economy will grow 1.6 per cent next year, when the country exits the European Union, finance minister Philip Hammond said on Monday as he delivered his last annual budget before Brexit.
Addressing parliament, the chancellor of the exchequer said British gross domestic product growth would expand faster than expected in 2019, up from an official prediction of 1.3 per cent made seven months ago.
While insisting that Britain’s decade-long era of austerity is “finally coming to an end”, Hammond added that the British “economy continues to confound those who talk it down”.
He added: “We continue to focus resolutely on the challenges and opportunities that lie ahead, as we build a new relationship with our European neighbours; a new future outside the European Union.” But concern is mounting that Britain will exit the EU in March without a deal in place with Brussels, an outcome widely seen as a worst-case scenario that would have a disastrous economic impact − and which would spark a new budget sooner than expected, Hammond confirmed.
He added that the government’s Brexit fund would be increased to £4.2 billion ($5.4 billion, 4.7 billion euros), an increase of half a billion pounds.
Philip Hammond also announced a fall in the country’s expected borrowing needs between now and the mid-2020s as he began his final budget speech before Britain leaves the European Union.
After a steady improvement in Britain’s once giant budget deficit, Prime Minister Theresa May said earlier this month that the government’s austerity push was coming to an end, a message echoed by Hammond on Monday.
But he has warned he would have to reverse the plan for higher spending in the event of an economically damaging no-deal Brexit in March, putting pressure on rebel lawmakers from May’s Conservative Party to stop blocking her Brexit strategy.
Speaking in parliament on Monday, Hammond said the budget deficit was set to stand at 1.2 per cent of gross domestic product in the current financial year, down from a forecast in March of 1.8 per cent.