The Autumn Statement, delivered by Chancellor Philip Hammond (24/11/2016), marks the first financial statement since the EU referendum in June. The measures, which are designed to boost investment, increase productivity and close the 'productivity gap', and raise confidence in the UK economy, include:
ses in rural areas.
ax-free personal allowance to increase to £12,500 by the end of the Parliament.
A ban on 'up-front' letting agents' fees.
Despite lower than expected borrowing figures for October, the Treasury still faces higher than expected borrowing in the medium term, with the Institute for Fiscal Studies estimating that there will be a £25bn short-fall in public finances by 2020, as a result of lower than expected growth.
Latest forecasts for the UK economy, prepared by the OBR, suggest a slowing down of growth until 2018, whereupon it is predicted to return to near its trend rate.
2.1% in 2016
1.4% in 2017
1.7% in 2018
The need for an Autumn Statement dates back to the Industry Act,1975, which forced the government to publish two forecasts each year – one in the spring budget - the Budget Statement - and one around autumn time. Initially, the Autumn Statement focussed more on government spending, leaving the budget to outline the government's taxation plans for the coming year. However, in recent years the distinction between the two staements has become less clear.
While Autumn Statements are eagerly awaited, this one will have special significance in that it is being delivered by a new Chancellor, and has the added spice that it is the first financial statement since the June referendum. Enough data has now become available in the intervening five months that the Chancellor and his Treasury team, along with the OBR, will have developed a reasonably well informed view of how the economy is dealing with the uncertainty of Brexit. Since the creation of the OBR, Chancellor’s have relied on it to provide independent data on the state of the UK economy, and on the public finances, which, since 2010 have been the major constraint on what the Chancellor could spend.