Spring statement: Hammond sees better times ahead despite weak growth, as £37bn Brexit bill looms - as it happened
Rolling coverage of Chancellor Philip Hammond's spring statement, including the latest growth and borrowing forecasts for the UK
- Brexit divorce bill estimated at 37.1bn
- Economists: Growth outlook is woeful
- Philip Hammond: Light at end of the tunnel
- John McDonnell blast Hammond's 'complacency'
- Growth forecasts up in 2018, but down in 2021 and 2022
- Politics Live: Salisbury spy poisoning latest
5.13pm GMT
Related: UK will save no money from Brexit for next five years, says OBR
UK will still be paying off the EU divorce bill in 2063. Staggering chart from today's @OBR_UK report pic.twitter.com/kvfKJIFbCV
Related: Hammond upbeat on growth and spending in spring statement
Related: Spring statement 2018: the chancellor's key points at a glance
5.11pm GMT
The chancellor did his best to make his speech sparkle, with a few rib-ticklers....
Related: Hammond's zingers: the best jokes in the spring statement
4.57pm GMT
Our economics editor, Larry Elliott, says Philip Hammond has a lot more work to do:
Since he became chancellor in the summer of 2016, Hammond has sought to improve the UK's productivity record through a range of measures including higher infrastructure spending, extra investment in research and development and a greater emphasis on vocational training.
But judging by its forecasts, the OBR thinks it will take many years for things to get better. It believes that the financial crisis and the deep recession that followed dealt a severe and lasting blow to Britain's long-term growth rate, reducing it from around 2.25% a year to 1.5% a year
Related: 'Tigger' Philip Hammond bounces back - but long-term outlook is gloomy | Larry Elliott
4.42pm GMT
The OBR have also adjusted their house price growth forecasts, and now expected weaker growth from 2019 onwards.
4.22pm GMT
The main organisation representing NHS trusts in England has welcomed Philip Hammond's "encouraging" recognition that the health service needs more money, though wants "urgent" action on that front, in contrast to the chancellor's decision to hold back any details -- and any extra cash -- until the autumn. Saffron Cordery, the deputy chief executive of NHS Providers, said:
It is encouraging that the chancellor has acknowledged funding pressures faced by the NHS which mean the service can't deliver the levels of patient care set out in the NHS constitution [key waiting time standards such as A&E treatment within four hours and planned hospital care within 18 weeks]. This winter we have seen the impact of under-funding and a lack of staff. We need to see urgent steps put in train to ensure sustainable long term funding for health and social care, because the current situation is unsustainable. It is also vital that any deal that is reached on pay is fully funded, as promised in the budget.
4.16pm GMT
The latest OBR forecasts for earnings are hardly Tiggerish.
The fiscal watchdog estimates that real earnings growth (pay minus inflation) will be subdued over the next five years, growing by just 0.7% per year.
Despite a very marginal upgrade to the forecast for earnings growth today, real average earnings are now expected to grow by just 3.5% over the next 5 years, meaning their level in 2022-23 would be similar to 2007-08 #SpringStatement @ESRC pic.twitter.com/bPAMO77JRb
4.08pm GMT
The Scottish government is complaining that it is not getting its fair share of the money set aside for Brexit preparations. In a statement Derek Mackay, the Scottish finance minister, said:
We are just over 12 months away from formally exiting the EU without a clearly agreed path in terms of our on-going access to key EU markets - this remains the biggest uncertainty hampering economic growth and investment and dragging our economy down.
The UK government have indicated they will allocate 3bn over 2018-19 and 2019-20 for expenditure on Brexit preparations, but that the Scottish Government will only receive 2.5%, or 37m, of the funding allocated in 2018-19. No details on 2019-20 funding have been provided.
3.58pm GMT
The government is theoretically committed to get net migration below 100,000 per year "Theoretically", because many ministers believe the target is unachievable. And the OBR does not believe it will be hit either. This is what it says in a passage about its Brexit assumptions.
Specifically, as regards the economy forecast, we assume that:
The UK adopts a tighter migration regime following departure from the EU than that currently in place, but not sufficiently restrictive to reduce net inward migration to the desired 'tens of thousands'.
3.48pm GMT
Three years ago this week, George Osborne proudly announced a new Help To Buy ISA that would (he claimed) get first-time buyers scrambling onto the housing ladder.
Under the plan, the government would provide a 50 top-up for every 200 saved for a deposit on a home (up to a 12,000 deposit).
The original costing estimated that cumulative Government expenditure would reach nearly 700m by the end of 2017-18. But take-up so far has been well below expectations and the total value of payments in the first 22 months of the scheme - to September 2017 - was just 104m.
We have revised down our forecast by a cumulative 23 per cent relative to our previous forecast. Compared to the original costing, cumulative spending is around 80 per cent (some 1.7bn) lower up to the end of 2019-20
3.44pm GMT
This is from Sky's economics editor Ed Conway.
It isn't so much that the UK is slumping. It's that every other major economy is accelerating, leaving the UK behind. Striking chart from the latest OBR report https://t.co/mxIcxRfe6q pic.twitter.com/vrHWMLUvSW
Great chart which captures the Brexit effect - no disaster but we have missed out on this latest global boom. The risk now is that (apart from the US which is absorbing a big fiscal boost) that global boom appears to be fading a little https://t.co/a9hNPwYqMQ
3.36pm GMT
This is from the Press Association's Ian Jones.
You have to go right back to 1875-1879 for the last time the UK economy grew by 1.5% or below for five years in a row. #SpringStatement
3.33pm GMT
Here are some comments from opposition MPs on the spring statement. MPs were responding in the House of Commons.
From John McDonnell, the shadow chancellor:
I say to the chancellor: his complacency today is astounding.
We face - in every public service - a crisis on a scale we've never seen before.
The progress of this government in readying for Brexit has been nothing short of shameful.
The UK government's own analysis tells us that under all scenarios, Scotland would suffer a relatively greater loss in economic output than the United Kingdom as a whole.
The spring statement was a non-event. The OECD [see 11.33am] gave us the clearer picture - that the economy is bumping along the bottom of the G20, well behind the likes of Australia, Canada and the euro area.
The OBR's fresh forecasts are still a long way behind the figures estimated in March 2016 before the EU referendum.
I have to say that the levels of hypocrisy from this government is quite extraordinary.
How can he pledge to be improving air quality while simultaneously boasting of undertaking the largest road building programme since the 1970s.
3.22pm GMT
Nick Macpherson, former Permanent Secretary to the Treasury (the top civil servant), suggests Philip Hammond is right to keep his fiscal firepower in case the UK suffers an economic shock....
Sensible OBR forecast. Sensible statement by Mr Hammond. Good to see public debt could fall next year. Need headroom against future shocks.
3.21pm GMT
Last year my collaegue Anushka Asthana revealed that, when George Osborne was chancellor, he came close to abolishing 1p and 2p coins. The idea was blocked by David Cameron, who thought the public would disapprove.
Now Philip Hammond has revived the idea. One of the 13 consultations he has published is on cash and digital payments, and the document (pdf) makes it clear that the Treasury increasingly thinks these coins are pointless. In a section of the consultation document leading up to the question "does the current denominational mix (eight coins and four banknotes) meet your current and future needs?", the document says:
In the normal course of the cash cycle, many denominations fall out of circulation, for example, by being placed into savings jars. Surveys suggest that six in ten 1p and 2p coins are used in a transaction once before they leave the cash cycle. They are either saved, or in 8% of cases are thrown away. To meet demand created by such losses from circulation, in previous years the government and the Royal Mint have needed to produce and issue over 500 million 1p and 2p coins each year to replace those falling out of circulation.
At the other end of the denominational scale the 50 note is believed to be rarely used for routine purchases and is instead held as a store of value. There is a significant overseas demand for 50 notes, with the notes used for some transactions, but mainly held as a store of value alongside other currencies such as the dollar and euro. There is also a perception among some that 50 notes are used for money laundering, hidden economy activity, and tax evasion ...
Though the value of the 50 note is low compared to other countries' highest denominations, in order to attempt to tackle the hidden economy and illegitimate use of cash, and maintain the integrity of the currency, some countries have removed their highest value notes from circulation or replaced them with banknotes with more security features.
3.15pm GMT
Although the OBR are forecasting slow growth over the next five years, they certainly aren't ruling out something worse.
The watchdog points out that there have been seven recessions over the last 61 years, suggesting that there's a 50:50 risk of one in the next five years.
...the probability of a cyclical shock occurring sometime over our forecast horizon is fairly high.
As regards this final risk of an unexpected recession, it is salutary to remember that exactly 10 years ago - at the spring Budget of March 2008 - the Treasury forecast that the economy would grow by a cumulative 4 per cent in calendar years 2008 and 2009, whereas the latest outturn data show a drop of 4.6 per cent.
As Chart 3.30 shows, only one of the 34 outside forecasters reporting their forecasts to the Treasury at the time predicted that real GDP would decline in either 2008 or 2009. In the Treasury's latest survey, none of the 40 respondents expect real GDP to decline in either 2018 or 2019.
3.02pm GMT
Although the growth forecast for 2018 has been marginally revised upwards, the IFS's Paul Johnson says, overall, the picture is still dreadful.
Not that much to be Tiggerish about here. Growth forecasts dreadful compared with what we thought in March 2016, dreadful by historical standards and dreadful compared with most of the rest of the world. https://t.co/qw1tZ9zy5W
Growth outlook much weaker than 2 years ago #SpringStatement @ESRC pic.twitter.com/J1RHB5YLc5
2.57pm GMT
The OBR says the amount of money the government is expected to raise from the soft drinks levy - a tax on sugar in drinks coming into force this year - has halved. It says in its report:
We have once again revised down receipts from the soft drinks industry levy, which comes into effect in April. The latest revision averages 30 million a year and reflects the latest information on reformulation rates. We now expect the levy to raise around 240 million a year on average from 2018-19 onwards, less than half the government's target of 500 million in 2019-20 when it announced it in March 2016.
This levy is about changing behaviour. It's about making people healthier overall. It's really positive that the industry has recognised this and engaged so much on this.
2.30pm GMT
City economists are giving their verdicts on today's forecasts, and some are pretty gloomy....
Aberdeen Standard Investments chief economist Lucy O'Carroll says Britain faces 'a decade of austerity' at least.
"The Chancellor was always clear that today's event was to be a modest one, and he kept that promise. But there is little to cheer by way of economic progress. A woeful growth outlook by past standards. Potentially massive dislocation for the economy just around the corner. And all subject to huge, Brexit-related uncertainties.
"Mr Hammond was keen to push a message about there being light at the end of the tunnel. It's true that the country's debt burden is about to fall. It's also true that for the first time since the financial crisis the UK is borrowing only to invest, rather than to fund day-to-day spending.
"After significant downgrades to growth and upward revisions to borrowing requirements just in November, the Office for Budget Responsibility has now revised up growth (for the near term) and taken down the borrowing forecasts over the next 5 years.
"That said we don't expect Hammond to go on a spending splurge in the Autumn Budget. He will likely save the extra room for manoeuvre ahead of the next election and to cushion any downside risks emerging from the UK's departure from the EU."
"Today was upbeat, but by the autumn we will know whether we have a Brexit deal or whether the UK will be moving straight to World Trade Organisation rules. So while Philip Hammond was the only one at the government despatch box today, the donkey in the room, the Eeyore, is still Brexit."
Since the war there's never been 5 consecutive years of GDP growth of 1.5% or below, as forecast today by OBR pic.twitter.com/5FHRCJJuy2
For the first time in modern history, UK GDP growth is still expected to fall below 2% in every forecast year (from now to 2022). #SpringStatement
2.20pm GMT
As the Resolution Foundation's Adam Corlett points out with this graph, the OBR now thinks that the output gap is positive. That means there is no spare capacity - in fact, the opposite
The OBR thinks the economy is now slightly above potential, for the first time since 2007-08. But that's not necessarily a good thing... pic.twitter.com/XwM8Vpa9mD
This means that despite almost no-one feeling like Britain's economy is going gangbusters, the @OBR_UK thinks we are actually outperforming what we can sustainably produce - that's the real pessimism underlying today's grim forecasts https://t.co/JF35t9HaE2
2.05pm GMT
In its analysis of the EU financial settlement (pdf) the OBR points out that, even though the government will stop making full contributions to the EU after Brexit, the government has committed to spend money on items that used to get funding through EU membership. In paragraph B.45 it puts figures on these commitments.
Farm support - around 3bn a year
2.00pm GMT
More detail of the OBR's Brexit bill estimate:
The most detailed breakdown of the Brexit divorce bill so far. Brussels pension liabilities will last to 2064, when we'll still owe 500m. pic.twitter.com/qjhCcVrE5R
1.53pm GMT
Economics professor Jonathan Portes has dug into the OBR's 'Brexit bill' work:
The Brexit dividend at last? OBR says Brexit will free up 3 billion a year by 2021-22, more thereafter, after taking account of "divorce bill"... https://t.co/RUh9cBo8V7 pic.twitter.com/cXDRAs7ToO
..but goes on to point out that it expect this to be more than offset by the negative impacts of lower immigration, productivity, etc, so the overall impact on public finances will be negative. pic.twitter.com/RWxRaQB6uC
1.35pm GMT
The Office for Budget Responsibility has estimated that Britain's financial settlement with the EU will cost 37.1bn.
This figure is based on the 'phase 1' agreement which the UK agreed with member states last December, and is contained in an appendix to the OBR's latest forecasts.
One of the more direct and readily quantifiable ways that Brexit will affect the public finances is by reducing or stopping the UK's contributions to the EU budget. But, soon after the referendum, the chancellor guaranteed funding for certain EU projects after the UK leaves the EU (eg in agriculture, science and structural fund projects), subject to various conditions.
And the prime minister has subsequently stated that the UK may continue to make contributions where it wishes to participate in some European programmes.
1.26pm GMT
The Treasury has published its spring statement documents on its website.
It has published 13 consultation documents - all available here.
1.15pm GMT
The Office for Budget Responsibility has released its verdict on the UK economy.
And it points out that Britain's economy isn't in a much better place than four months ago, when the last budget was released.
The economy has slightly more momentum in the near term, thanks to the unexpected strength of the world economy, but there seems little reason to change our view of its medium-term growth potential. And while the budget deficit looks likely to come in almost 5bn lower this year than we expected in November, the explanations for this imply smaller downward revisions for future years. As a result, the government's headroom against its fiscal targets is virtually unchanged.
The vote to leave the European Union appears to have slowed the economy, but by less than we expected immediately after the referendum - thanks in part to the willingness of consumers to maintain spending by reducing their saving. But it is important not to put too much weight on early estimates of economic activity either side of the referendum, not least because the bottom-up measures of GDP growth in the national accounts differ as to whether growth slowed down, speeded up or remained stable between 2016 and 2017.
The biggest surprise in the economic data released since November is that productivity growth - measured as output per hour - has been much stronger than expected. But that reflects a much weaker path for average hours worked, rather than stronger output or weaker employment growth.
The fall in average hours over the second half of 2017 is the largest since mid-2011 and second largest since the financial crisis. But in 2011 the fall in hours and associated pick-up in productivity growth proved to be erratic and were soon reversed. We assume for now that the same will be true on this occasion.
1.14pm GMT
More from the IFS's Paul Johnson:
Crucial OBR judgment: they believe the economy is running 0.3% above potential - despite years of poor growth economy in danger of over heating. One reason why better borrowing figures this year don't translate into better figures in medium term.
1.11pm GMT
Related: Business Today: sign up for a morning shot of financial news
1.10pm GMT
McDonnell says today's statement could have been a turning point. But it is a missed opportunity.
The Conservatives chose to cut budgets for the super-rich, he says.
1.07pm GMT
McDonnell says asking NHS workers to give up a day's holiday (reportedly a government proposals as part of the pay negotiations) is mean-spirited.
And he says the government is today trying to get MPs to vote to take away free school meals from 1 million pupils.
1.05pm GMT
John McDonnell, the shadow chancellor, is responding to Hammond.
He says Hammond's complacency is "astounding". Public service workers like doctors and nurses need Hammond to act now.
1.02pm GMT
More details of the plastic waste consultation:
On environmental issues Philip Hammond says the Government is making a call for evidence on single use plastics, the supply chain, alternatives and recycling opportunities #SpringStatement
Chancellor @PhilipHammondUK calls for evidence to tackle single-use #plastic waste. #SpringStatement pic.twitter.com/J9nDSr1uzf
Hammond says Treasury launching a "call for evidence" to look at options on reducing single use plastics - including taxes. Shout from Labour benches of "get on with it!"
12.58pm GMT
Hammond is now winding up, saying he wants the UK to be a force for good, and a country everyone can be proud of.
12.58pm GMT
Hammond says he will publish a call for evidence on whether the tax relief for agricultural diesel contributes to air pollution.
And he will consult on tax cuts for low-emission vans.
12.55pm GMT
Hammond says he will consult on a new VAT collection mechanism for online payments.
And he will consult on how to encourage digital payments.
12.55pm GMT
Hammond turns to housing.
There is an investment programme of 44bn, he says.
An investment programme of 44 billion to raise housing supply to 300,000 a year by the mid-2020s. #SpringStatement pic.twitter.com/oTdBnX6Jds
12.54pm GMT
Here's some reaction to the chancellor's comments on NHS funding:
Hammond says more NHS funding to come 'if management and unions can reach a deal'. Sounds like a big 'if', given that the offer seems to be a day less holiday#SpringStatement
Mr Hammond confirmed the Government is working with unions to reach a pay modernisation deal for NHS staff #SpringStatment
12.54pm GMT
More from the IFS's Paul Johnson:
To be clear - against a long term trend of at least 2% a year growth, after poor growth since 2008, and compared with growth across rest of OECD, these are not encouraging forecasts https://t.co/UjoizmQWBI
Our March 2018 GDP forecast. Full forecast published after the Chancellor's speech #SpringStatement pic.twitter.com/NjRw6nOaef
12.52pm GMT
Hammond lists some infrastructure projects the government is funding.
He says he is today inviting cities to bid for money from a new transport fund announced in the budget.
12.52pm GMT
Chancellor announces he'll use autumn budget to set out spending totals for 2020 and beyond - and full spending review in 2019. Says if improvement persists, he'll have more to spend on public services.
12.51pm GMT
Here's some reaction to the new growth figures, from Grant Thornton's Adam Jackson ...
#SpringStatement #GDP figures: compared to November 2017 forecast, today OBR forecasts 0.1% increase in 2018; same GDP growth rate for 2019 and 20; and then a 0.1% lower GDP growth in 2021 and 2022. So slight improvement this year outweighed by slight decrease in 2021 and 2022. https://t.co/sI9u1lpHCy
Growth forecasts higher in the short term but a little worse in 2021 and 2022. To misquote Sven Goran Eriksson - first half good, second half not so good https://t.co/zb2RJdbrCf
12.51pm GMT
Hammond says the ONS has been asked to work on a better assessment of human capital, so investment can be better directed.
12.51pm GMT
Hammond says the education secretary will release up to 80m to help small firms take on apprentices.
12.50pm GMT
Hammond says the government is committed to training. Next month the construction skills fund will be open for bids.
12.50pm GMT
Hammond says "substantial progress" has been made in the Brexit talks.
He looks forward to another step forward at next week's EU summit.
12.48pm GMT
Hammond says the government will champion those who create jobs and wealth, not demonise them.
McDonnell is open about his desire to undermine the market economy, he says.
12.46pm GMT
Hammond says at this year's budget he will set a path for spending from 2020, with a spending review taking place in 2019.
If in the autumn the public finances continue to reflect the improvements today's OBR report hints at, he will be able to increase public spending.
12.44pm GMT
Hammond says there will be more pay for NHS staff if management and workers reach a deal on a pay agreement.
Taxes have been cut for working people, he says.
We have cut taxes for 31 million working people by raising the personal allowance. #SpringStatement pic.twitter.com/J3iCPZKsj5
12.43pm GMT
Here are the Office for Budget Responsibility's new forecasts, compared with the ones a few months ago:
12.43pm GMT
From the IFS director, Paul Johnson:
Borrowing forecast for 2017-18 45bn, 13bn less than forecast a year ago and 4bn less than Autumn forecast. But structural deficit almost unchanged in 2019-20. #SpringStatement
12.43pm GMT
Hammond says there is light at the end of the tunnel.
But we must make sure it is not the shadow chancellor's train heading to a train wreck.
12.40pm GMT
Hammond reads out the borrowing figures:
2.2% in 2017-18
12.38pm GMT
Hammond says the OBR expects inflation, at 3% above target, to fall to target (2%) over the next 12 months.
.@OBR_UK expects inflation to return to its 2% target over the next 12 months. #SpringStatement pic.twitter.com/wfVZYEi76N
Here's our #SpringStatement 2018 economy snapshot. pic.twitter.com/bnBgbKSt30
12.37pm GMT
Hammond says the OBR report out today forecasts rising growth.
.@OBR_UK has revised its forecast up for 2018 from 1.4% to 1.5%. #SpringStatement pic.twitter.com/24naYaAtq3
Forecast #GDP growth is unchanged at 1.3% in 2019 and 2020 - before picking up to 1.4% in in 2021 and 1.5% in 2022. #SpringStatement pic.twitter.com/2AnDmEZtAU
12.36pm GMT
Hammond says universities are discovering new inventions, our culture spreads across the globe, and the tech sector is attracting investment from around the world.
And he lists some leading apps - including "Matt Hancock".
12.36pm GMT
Labour's Yvette Cooper says Britain's NHS cannot wait for the autumn budget - it needs more funds right now.
Chancellor starts Spring Statement by claiming we only need tax & spending changes in November - but that's too late for the extra investment we need for NHS before next winter. He needs to announce extra money for NHS today
12.35pm GMT
Hammond says the wages of the lowest paid are up by almost 7% since 2015.
There is solid progress towards building an economy that works for everyone.
Philip Hammond accuses Jeremy Corbyn of "relentlessly talking Britain down" every Wednesday at PMQs. Says any "Eeyores" in the chamber are on the Labour benches, describes himself as at his "most positively Tigger-like" #SpringStatement
12.34pm GMT
He says he won't be producing a red book.
But he can't speak for John McDonnell - a joke about the time the shadow chancellor brandished Mao's red book at the despatch box.
12.33pm GMT
Philip Hammond starts his statement by saying he is pleased to make his first spring statement.
The UK was the only major economy to make major tax changes twice a year.
12.31pm GMT
From Sky's Faisal Islam
Also heard from MPs that they really expect Treasury to start allocating the 3 billion No Deal Brexit funding from the Budget to the various departments that have bid for it, with just 12 months to go- problem, is that Govt don't want to be seen to play up No Deal right now
12.29pm GMT
Good afternoon. I'm joining the blog to cover the statement with Graeme.
Philip Hammond is due to stand up at 12.30pm. But his speech will be very short. The Resolution Foundation has tweeted this:
The shortest speech for a major fiscal event in the last decade was the December 2009 Pre-Budget Report at 46 mins. Will Hammond smash Darling's longstanding record?
12.23pm GMT
Paul Johnson, the head of the Institute for Fiscal Studies, points out that any improved borrowing forecasts today need to be compared with the pre-Brexit vote predictions:
Chancellor may well announce slightly better borrowing numbers in #SpringStatement But will still be much closer to Autumn forecast (top line below) than March 2016 forecast (bottom line). Economic and fiscal outlook has deteriorated a lot since March '16 pic.twitter.com/PvNdyCVqio
12.12pm GMT
Philip Hammond has just left Downing Street, and is heading to parliament to deliver the spring statement.
There's no 'red box' moment - the chancellor was carrying a red folder instead, and didn't hang around for many photos.
12.00pm GMT
Philip Hammond will start delivering the spring statement in 30 minutes (and wrap up before 1pm, if the hints of a short speech are true).
We'll be collating the key points here, as well as tracking the details and reaction in this blog.
11.51am GMT
Dr Faiza Shaheen, the director of the thinktank Class (Centre for Labour and Social Studies), wants Philip Hammond to boost investment and help workers today.
Councils are almost bankrupt, workers are overworked and underpaid, and we are losing the race with our competitors in the G7.
Britain can't afford more of the same failed dogma, especially given the uncertainty of Brexit. We need to see the public sector pay cap lifted, public services properly funded, and more borrowing for investment.
Watching Philip Hammond deliver his #SpringStatement tomorrow? Why not play our Buzzword Bingo. pic.twitter.com/FF5Le7hodk
11.45am GMT
It may not be a full budget, but that's not stopped the painter Kaya Mar from his traditional appearance outside Downing Street, satirising our political class:
11.33am GMT
s been handed a curate's egg by the Organisation for Economic Co-operation and Development this morning.
The OECD has raised its forecast for UK growth this year, but only to 1.3%. It then slows to 1.1% in 2019. That's weaker than last November's budget forecasts (which could be revised up today).
High inflation continues to damp real household income growth and consumer spending, and business investment is slowing, amidst continued uncertainty about the future relationship between the United Kingdom and the European Union.
OECD tee up @hmtreasury spring statement with forecast showing 2018 UK growth of 1.3%, the lowest of all advanced countries. pic.twitter.com/mElvj4QVYK
11.22am GMT
Prof John Maloney, an economist from the University of Exeter, believes Philip Hammond could invest more in public services and infrastructure.
He explains:
This is a good time to invest, with rates of interest so low, so it would make sense for the chancellor to take the brakes off a bit. But, as he has said, there are still economic challenges, and at the most he is likely to have only up to 10bn extra to play with because of a recent increase in productivity.
He could use it to increase spending, but also to cut taxes or let the deficit shrink faster. He could also cancel any spending cuts or tax rises pencilled in for the future.
11.15am GMT
Philip Hammond's message to Britain today will be "the deficit is dead, long live the debt", says Torsten Bell, the head of the Resolution Foundation thinktank.
In a blogpost, Bell explains how the elimination of the current budget deficit changes the landscape, but doesn't end Britain's problems.
Let's start with the dying bit. The chancellor will read out the obituary for the deficit that public finances data have written since the autumn. In short, improved tax receipts mean borrowing this year looks set to come in between 7 and 11bn lower than the 49.9bn projected by the Office for Budget Responsibility back in November.
The result is that the current budget deficit (excluding capital expenditure) disappeared on a 12-monthly basis at the end of last year. The thing that has, rightly or wrongly, dominated British economic debate this decade is no more.
11.01am GMT
There's less of a media presence outside the House of Commons today, compared with the full-blown budget.
That reflects the fact we're not expecting tax and spending changes today.
Slimmed down Spring Statement, slimmed down College Green pic.twitter.com/LEJYJ8oXBI
10.44am GMT
Kirsty Blackman, the SNP's spokesperson on the economy, says the chancellor needs to do more to help struggling families.
Speaking on Sky News, Blackman says:
We've still got one of the slowest growth rates in the G7. Things still look pretty bad.
10.43am GMT
We can expect Hammond to highlight one recent milestone today - UK tax receipts are now covering day-to-day spending.
Ian Jones of the Press Association has tweeted the details:
One piece of news Philip Hammond will almost certainly trumpet today: the government's day-to-day budget is in the black for the first time since 2002. #SpringStatement pic.twitter.com/v1BDUnzIOA
10.31am GMT
The shadow foreign secretary, Emily Thornberry, wants the chancellor to back plans for a 1.3bn tidal power lagoon in Swansea Bay, off the south coast of Wales.
In a video clip filmed during a trip to Wales, she says:
It's about time we got some good news on the tidal lagoon.
Come on Philip Hammond, give them what they want."
Shadow Foreign Secretary @EmilyThornberry says people in Swansea need a good news story and today's Spring Statement is a chance for @PhilipHammondUK to deliver one. #lovethelagoon pic.twitter.com/ZsDmKakvgE
10.09am GMT
The spring statement is being overshadowed by the Salisbury nerve agent attack, after Theresa May told MPs yesterday that Russia was probably responsible.
Rex Tillerson, the US secretary of state, has strongly backed May this morning - that's significant, as the White House declined to blame Russia yesterday. Moscow has until midnight to respond to the UK.
10.00am GMT
Philip Hammond's attempt to help younger travellers is backfiring his morning.
Due to unprecedented demand our website is struggling. We'll keep you posted here as soon as we resolve the issues. We're really sorry this is happing and have our whole team on it.
Given the demand for these when will there be another roll out without a restriction on numbers to the whole of the UK? Its unfair to wait when this is government backed to help younger people struggling with rail fare increases- I'll be 40 by the time I get one at this rate!
Dictionary definition of unprecedented... You know how many 26-30 year olds there are in the UK right? pic.twitter.com/mURGPTqXYr
Travelling by train can be very expensive and for younger people whose pay packets are already stretched it can be a massive financial burden. After the price hikes to rail fares in January, a 26-30 rail card could ease some financial pressure from millennials, especially those who rely on trains on a daily basis. There are some restrictions however this should offer at least some relief to financially stretched commuters who are currently stung by sky-high rail fares.
9.56am GMT
In other current affairs news (ho ho), the opposition whips' office has been plunged into darkness by a power cut:
Big day in Parliament with the Spring Statement and votes on Free School Meals and Childcare later . . . and we have no electricity in the Whips offices. Prime suspects are Julian 'dastardly' Smith and his Whips pic.twitter.com/neNUMnDMar
Power cut in parliament leaves @labourwhips in the dark.
[INSERT WITTICISM HERE]
9.28am GMT
One of the architects of the government's welfare changes is urging Philip Hammond to put more money into universal credit, reversing recent cuts.
Iain Duncan Smith says working families need more help, as my colleague Anne Perkins explains:
The former work and pensions secretary Iain Duncan Smith has warned the chancellor that he risks undermining the whole purpose of welfare reform if he fails to reverse cuts to universal credit (UC) in his spring statement.
Philip Hammond is under mounting pressure from across the party to use better than expected tax revenues to reverse cuts made after the 2015 election. Research by the Joseph Rowntree Foundation shows that 340,000 people could be taken out of poverty by reversing the cuts to work allowances.
Related: Reverse universal credit cuts, Iain Duncan Smith tells chancellor
Today after the Spring Statement, MPs will vote on Govt plans to cut free school meals in England, abolish child care vouchers and remove free childcare. The Tories show their true colours again, removing working aged benefits whilst giving tax cuts to richest https://t.co/am6MXboeuo
9.08am GMT
Related: Business Today: sign up for a morning shot of financial news
9.06am GMT
Overnight, John McDonnell, the shadow chancellor, has challenged Philip Hammond to end the 'misery' caused by the government's austerity programme.
Today the chancellor has a choice. He can choose to act and end the misery faced by many, or he can do nothing and continue to favour a privileged few.
Our public services are at breaking point and many of our local councils are near bankruptcy. He needs to listen to the calls from across the political spectrum, including the Tory council leader in his own constituency, to end the financial crisis in our public sector.
9.02am GMT
Interestingly, the BBC's Laura Kuenssberg reports that the cabinet has been discussing how to get more money into the NHS.
That could include ring-fencing a new tax increase specifically for healthcare (a 'hypothecated' tax).
Several senior sources say that, at the end of January, the cabinet discussed ways of getting more money into the health service in the long term.
That included the foreign secretary's by now familiar argument about the hoped-for but disputed Brexit dividend.
1. 'Most of us accept something has to happen' - could tax rises to pay for NHS be on the way? Cabinet has discussed how to find more cash for health, even tho today's statement won't open the cheque book - Have a read ... https://t.co/Kvbt5wgZ8a
2. No consensus yet, but there is growing acceptance at top of govt that NHS will need more cash, even tho there is caution about how and when
3. Spring statement today tho won't be moment for any splurge tho - Labour and the Tories hoping for extra cash for public services won't get their way way
4. Hammond will stick to need for 'balanced' spending - code for keeping tight lid on public spending while govt sorts out the debt
8.56am GMT
Our economics editor, Larry Elliott, has identified the five key things to watch out for in today's spring statement.
Related: Spring statement 2018: what to look out for in Philip Hammond's speech
Hammond is likely to say that the outlook for growth is marginally better than it was three months ago. In November, the OBR said it was expecting the economy to expand by 1.5% in 2017 and by 1.4% in 2018. The latest official figures from the Office for National Statistics show that growth was actually 1.7% in 2017 and the consensus among City, business and academic economists is that something similar is likely in 2018.
In the past, chancellors have used their statements to boast about the UK outperforming other economies, but that won't happen on this occasion given that Britain grew more slowly than all the other G7 countries in 2017 bar Italy.
8.51am GMT
Copies of the spring statement have arrived at Downing Street this morning:
Copies of the Spring Statement just arrived at The Chancellors gaff one imagines for his approval with only hours to go! pic.twitter.com/VRyzLwPPmk
8.49am GMT
Philip Hammond is also likely to launch several consultations today, which could lead to reforms and policy changes in the autumn budget.
8.25am GMT
Good morning. Philip Hammond is about to create a little bit of history, when he unveils the UK's first ever spring statement.
There is light at the end of the tunnel, because what we're about to see is debt starting to fall, after it's been growing for 17 continuous years. That's a very important moment for us.
"But we are still in the tunnel at the moment.
Next week I'll be delivering my Spring Statement and providing an update on the UK economy. Here's what the Spring Statement is all about.pic.twitter.com/AqlBsx7FOc
Continue reading...