LONDON, March 13 — Britain’s economy will grow slightly more than expected this year, finance minister Philip Hammond said today, despite the nation’s looming divorce from the European Union.
Gross domestic product is projected to grow 1.5 per cent this year, Chancellor of the Exchequer Hammond said in a budget update that hiked prior guidance of 1.4 per cent.
The new 2018 forecast however remains a slowdown compared with expansion of 1.7 per cent last year, and followed a gloomy OECD warning that Brexit would crimp growth over the coming years.
“I am pleased to report... on a UK economy that has grown in every year since 2010,” Hammond told lawmakers.
But the pace of growth was expected to slow further in 2019 — the year of Britain’s scheduled departure from the EU.
Hammond said growth would stand at 1.3 per cent in both 2019 and 2020, unchanged from previous forecasts. It would then pick up to 1.4 per cent in 2021 and 1.5 per cent in 2022.
Prime Minister Theresa May’s Conservative government had made “solid progress towards building an economy that works for everyone”, the chancellor continued.
Hammond added that the latest official forecasts, compiled by the Office for Budget Responsibility (OBR), forecast “more jobs, rising real wages, declining inflation, a falling deficit and a shrinking debt”.
Debt was forecast to drop as a share of GDP from 2018/2019 and the OBR has revised down both debt and borrowing in every year.
Borrowing is now forecast to be £45.2 billion (RM243.8 billion) in the current financial year that runs to April 2018.
That was £4.7 billion lower than forecast in November.
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”. — AFP