Within his Autumn Budget speech, Chancellor Philip Hammond reported on ‘an economy that continues to grow, continues to create more jobs than ever before and continues to confound those who seek to talk it down’.
However, in its report prepared for the Autumn Budget, the Office for Budget Responsibility (OBR) revised down its outlook for productivity growth, business investment and Gross Domestic Product (GDP) growth across the forecast period.
The OBR now expects GDP to grow by 1.5% this year, 1.4% in 2018 and 1.3% in 2019 and 2020. It predicts such growth to then pick up to 1.6% by 2022.
In addition, government borrowing is set to ‘fall in every year of the forecast’. Borrowing this year will be 2.4% of GDP.
It will then fall from £39.5 billion in 2018 to £25.6 billion in 2022/23, reaching ‘its lowest level in 20 years’.
Inflation is set to rise to 3% during the final quarter of 2017, and will ‘fall back towards target’ over the next year.