United Kingdom unlikely to balance budget by mid-2020s

  • United Kingdom unlikely to balance budget by mid-2020s

United Kingdom unlikely to balance budget by mid-2020s

The IFS also predicted that the UK's national debt might not return to pre-financial crisis levels until "well past" the 2060s, that public services outside the National Health System faced seven percent cuts in day-to-day spending over the next five years, and that the government forecast of a 3.5 percent GDP per head drop in 2021 would hit the economy excessively hard.

According to the IFS report, falling industrial output threatens to put 2012 average wages nearly £1,400 ($1,865) below the March 2016 forecast and lower than where they were at the time of the 2008 financial meltdown. 'There are still almost £12billion of welfare cuts to work through the system, while day-to-day public service spending is still due to be 3.6 per cent lower in 2022/23 than it is today'.

Johnson, who is 50 years old, was less upbeat about the chances of reducing Britain's national debt and said he would be dead before the UK's national debt is reduced to its pre-credit crunch levels, even if there were no recessions for the next fifty years. The Office for Budget Responsibility slashed its growth forecasts as a result of weak productivity, and Hammond piled further pressure on the budget by pledging extra cash for the health service and abolishing the tax on some housing purchases for first-time buyers.

The "truly catastrophic" cuts to the OBR forecasts for growth suggest the economy will be £42 billion smaller in 2022 than had been expected in March, the Foundation said.

The Prime Minister praised Mr Hammond during a visit to Leeds following reports in recent weeks that she might move the Chancellor in a Cabinet reshuffle.

He added that Mr Hammond's giveaways were "not the end of austerity - not by a long chalk".

Budget 2017 Philip Hammond in Palriament
REUTERSBudget 2017 Economists are not expecting changes to the interest rate in the next few months

The award-winning Resolution Foundation said the OBR data showed British families are suffering the biggest squeeze in their finances since the 1950s.

NHS England chairman Sir Malcolm Grant said while the money would go "some way" towards filling the funding gap, the health service could "no longer avoid the hard debate" on what it could provide on the funds it has. We've got a low-growth economy, we've got the shadow of Brexit over-hanging, we've got years of low growth ahead of us, a very significant problem with productivity. So what Philip has had to do is to put sticking plasters on some hard issues as best he can.

Earlier, Mr McDonnell had told the audience of a Labour government's pledge to build one million new homes, of which half would be "council houses".

"Of course we need to increase the supply of homes".

"At that point, please remember the way you short-changed our public services by avoiding taxation".