Spring Statement: Deloitte economic and tax predictions
9 March 2018
The Chancellor will deliver the Spring Statement on 13 March 2018. Ian Stewart, chief economist at Deloitte, and Bill Dodwell, tax policy partner, set out their predictions for the Spring Statement below.
Ian Stewart, chief economist at Deloitte, said:
“Having wisely switched to a single Autumn Budget, the Spring Statement will be a pared back, low-key event. Shorn of tax and spending decisions, pretty much all that’s left in the Spring Statement is an update of the Office of Budget Responsibility’s November forecasts.
“The OBR’s current forecasts for growth, at 1.4% in 2018 and 1.3% in 2019 are marginally more pessimistic than the average private sector forecaster. On balance I think they’ll stick with this cautious view, but there’s a decent chance they nudge up both years to 1.5%.
“The OBR unveiled a pessimistic long-term forecast for productivity in November. However, data since then has shown an acceleration in productivity growth. This is still early days so I don’t think there will be any change to their current long-term view on productivity.
“Since November the economic outlook has brightened. Global growth has come in stronger than expected and government borrowing has fallen more quickly than forecast.
“The good news is that the improving trend in public borrowing will enable the OBR to pencil in substantially lower numbers for public sector borrowing in the next two years. In terms of the government’s target of eliminating the current budget deficit, excluding investment, the Spring Statement seems likely to show that most of the hard work of deficit reduction has been achieved.”
Bill Dodwell, tax policy partner at Deloitte, said:
“Tax specialists will look out for any consultations from the Treasury. The single Autumn Budget allows for more time to be given to medium-term tax policy development, rather than quick-fire changes. The UK needs to consider the future shape of the tax system, as technology and the digital economy develops.”
Notes to editors
Spring Statement commentary
For reactions on the day of the Spring Statement from Deloitte’s economics and tax team please contact the Deloitte press office on 020 7303 5054.
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