Hammond's boring Budget speech promises very little

The vote to leave the EU gave the chancellor a very good excuse to do very little in what he promises was his last spring Budget.

Chancellor Philip Hammond must be thanking his lucky stars that Britain voted to leave the European Union (EU). Not only did it land him the role of second most powerful politician in Britain, but it also gave him a very good excuse to do very little, in what he promises was his last spring Budget (from now on, the constant fiddling with our tax system will be limited to an annual autumn statement, we're told). Yet even if we didn't have Article 50 and the Brexit negotiations lying ahead for the rest of this year, the chancellor was right to be cautious. The British finances might not be quite as bad as he expected when he stood up in late 2016 (public borrowing this year is set to be £51.7bn rather than £68bn, and growth is expected to be higher), but they're still dreadful.

The Office for Budget Responsibility (OBR) which looks at the government's sums then provides independent (if still generally wrong) economic forecasts based on them reckons we'll still be spending more each year than we raise in taxes by 2021/2022 (ie, we'll still have a deficit). For a bit of perspective, overall borrowing in 2020 will be £100bn greater than originally forecast in March 2016. Given that the OBR also expects to see higher average inflation (at or above 2%) over the coming years, and that it expects wages to grow faster than that, we can't expect today's microscopic interest rates to last for very much longer so the cost of servicing that debt should very much be at the forefront of any sensible chancellor's mind.

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