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Six things we've learned from the spring statement

13 March 2018

The Chancellor attempted to deliver a more upbeat statement amidst the uncertainty that surrounds the United Kingdom economy, pointing to signals for stronger growth and falling inflation.

It predicts GDP to remain at 1.3% in 2020, also unchanged.

Instead, Hammond unveiled the latest economic forecasts from the Office for Budget Responsibility which show how the United Kingdom economy is performing.

Those forecasts, based on the assumption that Britain would stay in the European Union, saw growth of above 2 percent for each year between 2018 and 2021.

The improved outlook for growth means the government will borrow less by the early years of the next decade than previously forecast, Hammond said.

Lower than expected borrowing and higher than predicted GDP growth a year ago will bring a note of optimism, but Philip Hammond has already suggested it is too early to take his foot off the austerity brake.

The UK GDP is set to grow 1.5 per cent between 2018 and 2019, up from 1.4 per cent from previous estimates.

Mr Hammond said he thought the economy may be on the "beginning of a turn in the trajectory of productivity performance".

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Mr Hammond said some businesses were avoiding paying VAT on sales, but he added that others were simply unfamiliar with paying taxes as this had been done on their behalf.

Cash payments made up 40% of payments in 2016, and are predicted to fall to 21% by 2026, while the growth of digital payments has been fast-paced, according to the consultation paper.

Moving on to the next slice of good news, the chancellor was able to confirm that inflation would "fall back to target over the next 12 months" - arguably giving the government and Bank of England some wriggle room to further delay monetary tightening.

It comes as the number of ATMs in the United Kingdom is under threat from proposed increases to interchange fees.

Citing the success of the five pence plastic bag levy, the Treasury will be gathering evidence from environmental organisations, businesses and individuals on how the tax system can be used to reduce the UK's reliance on plastics.

The debt forecast is almost 1% lower than in November, Mr Hammond said.

The chancellor has hinted that he will increase spending on public services when he delivers his budget in the autumn. The Housing Growth Partnership, which provides support to smaller housebuilders, will also be doubled to £220 million.

The Chancellor also informed MPs that around 60,000 first time buyers have benefited from the stamp duty relief he announced in the Autumn Budget.

Six things we've learned from the spring statement