Britains Autumn Statement casts shadow on Brexit success

Philip Hammond, the Chancellor of the Exchequer, delivered his Autumn Statement as of November 23^rd. However, the statement was particularly difficult to draft this year. Since the unexpected result of the Brexit referendum, Britain has found itself into an unprecedented state of uncertainty.

The country is still unsure of what kind of Brexit will be implemented. This makes any possible economic forecast very difficult to draft.

The Office for Budget Responsibility (OBR) believes that the economy, by 2020, will have grown by 2.4 less than predicted before the Brexit referendum. This would result into an increased borrowing on the part of the United Kingdom. Although unsure of what shape Brexit will take, leaving the single market casts a worrying shadow over the future of the economy.

It is clear however that the Chancellors objective is to be able to address every possible issue deriving from Brexit. A budget surplus is expected to be reached by 2019-20, which should be consequently be followed by a decrease in public debt.

Mr Hammond aims at borrowing more in order to cover higher welfare spending and encourage tax cuts. This would accommodate the foreseeable slowing down of the economy once Brexit is triggered.

However, although much of the spending will be focused on infrastructure (including digital infrastructure), Mr Hammonds plans drag on growth for the coming years.

The Statement also included measures aimed at increasing minimum wage for over-25s, reducing “taper rate” and freezing fuel duty for 2017. Nevertheless, the Statement failed to hide how painful Brexit is going to be for Great Britain.

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