Mission Accomplished?

Mission Accomplished?

On the eve of the Spring Statement, Philip Hammond finds himself in a much happier position than last time he faced the Commons. The UK is finally running a current budget surplus, productivity growth has been strong over the past six months and real wages are forecast to grow through this parliament.

So should the Chancellor heed calls from Nick Timothy and others to declare an end to the age of austerity?

‘Mission Accomplished?’, an analysis of the state of the British economy by Robert Colvile and Daniel Mahoney of the Centre for Policy Studies, argues that there is in fact no room for complacency.

Recent figures showing that the UK has a day-to-day budget surplus are welcome, but the country still has an overall budget deficit and the debt-to-GDP ratio is nearly 90%. Meanwhile, growth in the UK is largely being shored up by the performance of the world economy. And the Chancellor has already sanctioned almost £60 billion in extra spending over the coming years to see the economy through the Brexit process.

Robert Colvile, Director of the Centre for Policy Studies, said: “At the Autumn Budget, Britain saw its productivity forecasts – and its expected future growth – slashed sharply. The picture facing Philip Hammond today is much rosier.”

“But the task of shoring up the public finances is not yet complete – and Britain’s productivity levels are still well below where they could or should be. It is addressing these issues that should be the Chancellor’s priority.”

Robert Colvile, Daniel Mahoney - Wednesday, 7th March, 2018