UK GDP to experience modest growth

The UK chancellor said there is “light at the end of the tunnel” as he unveiled a small boost to the nation’s growth outlook.

In his Spring Statement to Parliament yesterday, Philip Hammond said the British economy is set to grow by 1.5 per cent this year, slightly higher than the 1.4 per cent forecast in November.

But the forecasts for 2019 and 2020 were kept unchanged at 1.3 per cent, while it was reduced to 1.4 per cent for 2021.

The forecasts, provided by the independent Office for Budget Responsibility, still leave the UK among the slowest growing major economies in 2018, at a time when global growth is picking up.

Earlier yesterday, the Organisation for Economic Cooperation and Development said Britain would grow more slowly than all the other G-20 leading economies this year.

The predictions are also significantly lower than those made before the Brexit vote, when growth was expected to be above 2 per cent for each year between 2018 and 2021.

Lucy O’Carroll, chief economist at Aberdeen Standard Investments, said there was “little to cheer” from the chancellor’s statement.

“A woeful growth outlook by past standards. Potentially massive dislocation for the economy just around the corner. And all subject to huge, Brexit-related uncertainties,” she continued.

Seeking to strike an optimistic note, Mr Hammond told MPs: “I am pleased to report... on a UK economy that has grown in every year since 2010.”

Prime Minister Theresa May’s Conservative government had made “solid progress towards building an economy that works for everyone”, the chancellor continued.

Mr Hammond added that the borrowing forecasts confirmed “the first sustained fall in debt for 17 years, a turning point in the nation’s recovery from the financial crisis of a decade ago”.