TopicTigger Hammond knows he has a difficult hand
The chancellor said he was feeling very Tiggerish. And that it was the "Eeyores of Labour" who were talking down Britain. But Philip Hammond knows he has a difficult hand to play.Yes, the Office for Budget Responsibility (OBR) did upgrade growth for this year. Global growth is better (which helps the UK, an exporting nation), manufacturing is doing well and exports are strong. But the upgrade was modest. And it suggested that growth will not move above 1.5% over the forecast period, that's until 2022. That is below trend growth of 2% and shows just how difficult a position the economy is in. The OBR actually slightly downgraded growth for 2021 and 2022. Adding to the sense that whatever lights there may be, the "new normal" of growth is below where it used to be - the economic speed limit of the economy has fallen.
Which raises significant questions about the funding of public services and paying off the national debt.
The slower a country's economy grows, the less tax revenue it creates and less income a government has. Which is why, although there was an improvement in the borrowing figures today compared with the grim forecast of last November, again it was modest. And at £45.2bn total net borrowing for 2017-18, is still well above where it was expected to be back in 2016.