Light at the end of the tunnel ... but UK will still be borrowing £45.2bn

IN his first spring statement, Philip Hammond said borrowing was now due to fall in every year of the forecast to 2022/23.

Debt, he told MPS, was also forecast to fall as a share of GDP from 2018/19 and the Office for Budget Responsibility, Britain’s fiscal watchdog, had revised down debt and borrowing in every year.

Borrowing was now forecast to be £45.2 billion this year, £4.7bn lower than forecast in November.

Meanwhile, the debt forecast was nearly one per cent lower than in November, explained the Chancellor, peaking at 85.6% of GDP in 2017/18 then falling to 85.5% this year and by 2022/23 reaching 77.9%. It was expected to be “the first sustained fall in debt for 17 years,” declared Mr Hammond, “a turning point in the nation’s recovery from the financial crisis of a decade ago”.

He added there was now light at the end of the tunnel.

But while the economy was due to grow through the forecast period, it will be much lower than in previous years. The OBR had revised up economic growth for 2018 from 1.4% to 1.5% and would then be unchanged at 1.3% in 2019 and 2020, before picking up to 1.4% in 2021 and 1.5% in 2022.

Yet in previous years Britain had regular growth rates of around 2.5%.

And the OECD international watchdog produced an even gloomier outlook, suggesting the rise in GDP would be 1.3% this year and 1.1% in 2019, placing the UK at the bottom of the G20 growth table.

The OBR meanwhile pointed out that the Government was set to miss its target and would not balance the books until 2027, despite handing the Chancellor a rosier economic outlook.

Elsewhere, the Treasury listed how much it had allocated for Brexit preparations for this year with the Scottish Government being handed £37.3 million.

The largest allocation has gone to the Home Office at £395m with the Environment Department being given £310m.

In contrast, the Scotland Office has just £300,000 to spend, the lowest allocation.