Britain’s struggles to inject real life into its sluggish economy will last for another five years.
Chancellor Philip Hammond revealed in his Spring Statement that productivity will be below 2% up until at least 2022.
While the independent Office for Budget Responsibility reports that GDP growth for 2017 had come in 0.2% up on forecasts to hit 1.7%, the outlook remains bleak.
Hammond said the OBR was predicting GDP to grow by just 1.5% this year, followed by just 1.3% in 2019.
Years of anaemic GDP growth.
— George Eaton (@georgeeaton) March 13, 2018
One commentator described the growth figures as “anaemic”, while the Organisation for Economic Co-Operation and Development (OECD) earlier pencilled in growth of only 1.3%.
That’s up from a November forecast of 1.2% but it would still see the UK lagging behind all other G20 countries.
The chancellor sought to deliver a more upbeat assessment of the UK’s finances, describing the Labour party as merchants of “doom and gloom”.
Rejecting his label as an “Eeyore”, he told the Commons that “I am positively Tigger-like today” – but the forecasts show little sign of a major bounce in the economy.
His first Spring Statement – unlike a full-blown Budget – contained no tax changes or new spending commitments.
— OBR (@OBR_UK) March 13, 2018
Instead, it was an update for the country on where the economy stands now, compared to his Autumn Budget.
Hammond reported borrowing was likely to be £45.2bn this year – down £4.7bn on November predictions.
He said the level of debt was predicted to fall from 85.6% of GDP to 78% in 2021-22. He told MPs that there was “definitely light at the end of the tunnel”.
To that end, he said, that if there was capacity come the full Budget in the autumn to loosen the purse strings, he was prepared to do so.
The chancellor also used the statement to confirm consultations would be launched into how the tax system could be used to tackle single-use plastic waste and also getting more taxes out of tech giants.
A review of the VAT “collection mechanism” would be undertaken to see how more of the money users pay on such sites as eBay and Amazon could actually reach the Treasury coffers.
— HM Treasury (@hmtreasury) March 13, 2018
Little was mentioned on Brexit, other than to say the previously announced preparation money was ready to be allocated.
He said: “But we will continue to prepare for all eventualities and today … the chief secretary is publishing the departmental allocations of over £1.5bn of Brexit preparation funding for 2018/19.”
Labour’s shadow chancellor John McDonnell said in reply that this was “the indefensible spectacle of a chancellor congratulating himself on marginally improving economic figures”.
He added: “Hasn’t he listened to the doctors, the nurses, the councils – they cannot wait until the next Budget.”