Trumped by events?

President’s campaign promises on tax and spending are yet unfulfilled

DONALD TRUMP’S failure to pass meaningful tax cuts or spending plans means early hopes that he could boost the US economy are likely to come to nothing, economists believe.

The president’s election pledges to splurge on infrastructure and to slash taxes gave a boost to stock markets and to business confidence, which is now showing signs of faltering.

Far from doubling the pace of economic growth as pledged, economists think the trend rate of growth in the US is now on the way down.

“It seems that he’s no closer to fulfilling his campaign promises than the day he took the helm of the world’s biggest economy,” said Beth Ann Bovino, US chief economist at Standard and Poor’s. “And markets have begun to reflect this view, with sentiment readings, once bolstered by campaign promises, starting to soften.

“Relying on the long-standing truth that campaign promises aren’t (and often never become) government policy, we largely discounted last autumn’s rhetoric in our December forecast for US economic growth. Now, we no longer believe the federal government will be able to push through even a small infrastructure-spending package, and we expect only moderate tax cuts to be passed early next year as midterm elections approach.”

S&P expects the US economy will grow by 2.2pc this year and 2.3pc in 2018 – a modest acceleration, rather than the doubling of GDP growth that Mr Trump wants.

However, there is some positive news for the president. The economists say there is now a smaller chance of the economy tumbling into a recession, cutting the likelihood of it from between 25pc and 20pc, to 15pc to 20pc.