Chancellor Philip Hammond told the Commons in his Budget that the UK’s economy will grow faster than previously predicted in 2017.
- The UK economy is growing faster in 2017 than previously forecast
- The Office of Budget Responsibility has raised economic growth predictions for the year to 2%, up from the 1.4% it had initially tipped in November
- It underlines the strength and resilience of the UK, as global political and economic uncertainty makes investors around the world consider overseas investments
It created huge amounts of discussion before and immediately after last year’s European Union referendum.
And on Wednesday (March 8th), the UK Chancellor of the Exchequer, Philip Hammond, told the House of Commons that the UK economy is growing faster than initially anticipated in 2017.
Giving his first Budget speech, and the final one that will be held in the spring, Mr Hammond declared that the country had “confounded the commentators with robust growth”, revealing that the Office of Budget Responsibility (OBR) had raised its economic growth forecast for the year to 2%.
It marks an improved revision of the 1.4% it initially forecast in November’s Autumn Statement. But while the OBR has warned that growth will be slower over the next few years, a prospect that’s not unduly unexpected given the upcoming complexity of Brexit negotiations, this short-run growth for 2017 does underline the resilience of the UK economy during a period that many had initially speculated would prove challenging.
The Chancellor also announced that the OBR has estimated that UK debt levels will begin to fall in 2018/19. While they will peak at 88.8% of economic output at the start of next year, they will then begin their first decline in almost 20 years, reaching 79.8% of economic output by 2021-22.
These new figures come at a time when global uncertainty, from Donald Trump’s presidency to key elections across Europe, is forcing many investors to consider adding overseas assets to portfolios.
But while the UK still remains one of the safest places to move money, potential investors should also be warned that British inflation levels are expected to remain at or above the Bank of England target of 2% over the next three years. While this could prove difficult for government bond investors for example, it does serve to the highlight the need to consider safe-haven assets such as UK property, with performance based on supply and demand dynamics rather than external economic fluctuations.