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As the CPS warned, productivity forecasts were slashed at the Budget, leading to 3 percentage points of growth being wiped out over the next 5 years- The Chancellor’s measures on universal credit and NHS spend were necessary, and moves on business rates will help firms of all sizes.
- The Budget was not serious on dealing with productivity problems, the measures on housing were deeply disappointing
- The Budget was dominated by the OBR’s slashing of productivity forecasts, which wiped 3 percentage points off predicted economic growth over the next five years.
- As a result, Britain will borrow more and is further away from achieving a budget surplus.
- Given these constraints, the Chancellor could have done a lot worse. In particular, the changes to Universal Credit were necessary, and the help on business rates and freezing of the VAT threshold will help firms of all sizes.
- Measures on housing were deeply disappointing, however. No concrete steps on planning were announced, and abolishing stamp duty for first-time buyers could actually make things worse.
- Hammond should be commended for not going on a spending splurge – but this Budget will do little to solve the UK’s productivity woes.
