UK chancellor sees (dim) light at end of tunnel
Quickview: There was some cautiously positive news in the chancellor's Spring Statement, but he did not mention that the UK is currently the weakest economy in the G7.
Authors
For what was meant to be a simple economic statement, the UK chancellor Philip Hammond turned much of the first spring budget into a political opportunity to have a dig at the Labour party, with barbs about red books and oncoming trains.
Certainly, he did have an opportunity to unveil stronger growth for this year alongside a forecast of UK inflation falling back to target by the end of the year. Government borrowing has returned to surplus, excluding investment, and debt is set to peak. All good news.
However, much of this was anticipated and it is still fairly cautious, with only a modest upward revision to growth of 0.1% to 1.5% this year.
We should not be surprised: it’s too early in the political cycle for anything more bullish and the chancellor himself said that forecasts are there to be beaten.
No mention, though, of the UK being the weakest economy in the G7 at a time when the rest of the world is booming.
We welcome the initiatives on housing and training, areas key to getting productivity back on track and boosting long run growth.
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.
Authors
Topics