Wed | Nov 14, 2018

UK budget sees economy wilting under Brexit pressure

Published:Thursday | November 23, 2017 | 12:00 AM
Britain's Chancellor of the Exchequer Philip Hammond waves and poses for the media as he holds up the traditional red dispatch box, outside his official residence 11 Downing Street, before delivering his annual budget speech to Parliament, in London, yesterday. (AP)


Britain's Treasury chief has outlined cautious spending plans to a nation bracing for the shock of leaving the European Union, amid a stream of worsening of economic forecasts that hampered room for giveaways.

Philip Hammond revealed the deteriorating outlook in his annual budget speech to Parliament yesterday, with slowing growth and a stubborn deficit offering little space to increase spending in the face of demands from teachers, firefighters, police and the military. Adding to the pressure for fiscal restraint was the need to preserve state coffers for the potential turmoil of Brexit.

"We are at a turning point in our history," Hammond told the House of Commons. "And we resolve to look forwards, not backwards."

Hammond set aside three billion pounds ($3.9 billion) over two years to prepare for Brexit and offered a package of initiatives to build new homes and ease the country's housing shortage, but he otherwise sidestepped eye-popping initiatives. He promised to "invest in the future," with money to improve infrastructure, spur the development of new technologies and teach advanced mathematics to more children.

"More maths for everyone," Hammond said in a cheerful effort to put the best face on things. "Don't let anyone say I don't know how to show the nation a good time!"

Hammond, who has been nicknamed 'Eeyore' because of his cautious approach, had been under pressure to appear upbeat about the economy's prospects after Brexit. Prime Minister Theresa May's weakened government was hoping for excitement without controversy particularly since anything too revolutionary might get voted down.

The Chancellor of the Exchequer tried to paint an optimistic vision of a "global Britain" that would embrace the technological revolution and capitalise on the opportunities presented by leaving the EU. He promised an approach that would be "balanced" amid pleas to end austerity.