2018 growth is forecast to go up from 1.4 to 1.5%. While it’s currently 3%, inflation should be closer to 2% come December, and government borrowing is due to fall to £21.4bn by 2021-22.
In a day where the statement was perhaps overshadowed by news of the US Secretary of State’s sacking and the ongoing UK-Russia spy situation, many people may have missed the headlines coming out of Westminster.
With a turbulent political climate persisting since 2016 and Brexit inching ever closer, forecasts should perhaps be viewed with a modicum of restraint. Despite a lack of major fiscal announcements however, there were some notable points we should all take note of:
Headlines for businesses and employers
- The next evaluation on business rates will be conducted in 2021
- A consultation will be held to evaluate the future of 1p and 2p coins and £50 notes
- Tax relief for self-employed individuals and employees undertaking training will be subject to an extended consultation
- £20m will be allocated to businesses and universities to research ways to reduce the impact of plastics on the environment
Tax and spending implications
- The National Living Wage is due to increase as promised, to £7.83/ hour in April, while wages are expected to grow faster than prices over the next five years
- There will be a consultation on reducing tax for the least-polluting vans
- 60,000 first-time buyers have benefited from the stamp duty holiday in November’s budget
It’s important to remember that this statement is not a full-blown budget- these have been moved to every November. This statement is rather intended as an update on the progress of the economy, and indeed this formed the base of Hammond’s primary focus.
Our Welsh readers should also note that more and more budgetary decisions are being delegated to the Welsh Assembly on an ongoing basis. Particularly important decisions include Wales’ first tax-raising powers in centuries coming in to effect from April.
Stamp Duty will be devolved from next month, along with income tax raising powers from 2019. You can read more about this in our article from February.