Borrowing expected to fall by up to £7bn

PHILIP HAMMOND is set to deliver a dose of economic cheer in next week’s Spring Statement thanks to sharply lower borrowing forecasts – but there will be no tax giveaways, experts say.

Economists believe Britain’s fiscal watchdog will nudge up near-term growth forecasts as the global economy powers ahead, while slashing expected Government borrowing for 201718 by as much as £7bn.

But the Chancellor is likely to bank the windfall as a muchneeded buffer, with the impact of Britain’s EU divorce bill on the public finances set to be laid bare for the first time.

The Office for Budget Responsibility will estimate the hit to the public purse from Brexit payments to the EU every year for decades. This follows the Government’s agreement to pay between £35bn and £39bn under an initial settlement.

With the focus firmly on the economic forecasts and Brexit bill, the Spring Statement on March 13 is otherwise expected to be a non-event after Mr Hammond made clear he wants to keep major announcements to the main Budget in November.

Samuel Tombs at Pantheon Macroeconomics is forecasting borrowing to be cut to £43bn for the year to the end of March, down from the £49.9bn predicted by the OBR in November.

It comes after official figures showed the second-highest surplus since records began in January thanks to a bumper haul of tax receipts.