UK raises growth fore­cast for 2019 Brexit year

The Gulf Today - Business - - FRONT PAGE -

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.

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