Britain’s productivity crisis matters. Don’t expect Philip Hammond to mention it | Duncan Weldon

Slower economic growth is likely in the next few years, and it's going to harm living standards. The chancellor should stock up on headache tablets

The news that the government's independent fiscal watchdog, the Office for Budget Responsibility, is about to slash its forecasts should not have come as a surprise. The chancellor's fiscal plans were based on forecasts dating back to March this year and already looked to be, once again, too optimistic. The IMF, the OECD and, most notably, the Bank of England, have already sounded a more pessimistic tone and, to an extent, this is just the OBR playing catch up.

But even if the news isn't exactly unexpected, it is still a political headache for the chancellor, and perhaps goes some way to explaining the modesty of the giveaways at this week's Conservative conference. In his autumn statement of 2016, Philip Hammond relaxed the fiscal rules and gave himself plenty of room for manoeuvre, but that space is now vanishing, just when the political pressure for higher spending is on the rise.

Productivity estimates rarely feature in a chancellor's budget day speech, even as one of the most important variables

Related: UK economy may not withstand interest rate rise - S&P

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