2019 Spring Statement - the economic picture

13 Mar 2019

In his Spring Statement speech, Chancellor Philip Hammond responded to the latest forecasts as published by the Office for Budget Responsibility (OBR).

Acknowledging that economic growth in the UK and around the world has 'slowed since the Budget' in October 2018, the OBR cut its UK growth forecast for 2019 to 1.2% from 1.6%.

It also revised down its government borrowing forecasts: the OBR expects the government to borrow £22.8 billion this year, which is significantly lower than the £25.5 billion predicted during the 2018 Autumn Budget. The OBR attributed the decrease to 'higher income tax receipts and lower debt interest spending'.

The OBR stated that it produced its latest forecasts 'against a backdrop of considerable uncertainty', primarily generated by Brexit. As a result, it stated that it has 'no meaningful basis for changing the broad-brush assumptions' that have underpinned its forecasts since the EU Referendum.

The OBR said that a 'disorderly' 'no deal' Brexit 'remains the biggest short-term risk' to its forecasts.