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Autumn Statement: Gloomy forecasts overshadow infrastructure and innovation focus

The Chancellor, Philip Hammond, sprung few surprises in his first (and last!) Autumn Statement yesterday as marquee announcements were increasingly overshadowed by gloomy growth forecasts and warnings of a massive increase in government borrowing.

The country had already been briefed on some of the biggest initiatives revealed in the House of Commons, from the £2bn in research and development investment to the scrapping of letting fees for tenants and the £400m boost for the UK’s broadband infrastructure.

Not to mention the widely predicted splurge on infrastructure projects set to be unleashed by the £23bn National Productivity Investment Fund.

A continued commitment to the reduction in corporation tax and a further £400m commitment from the government to the British Business Bank to invest in startups, topped off a decent statement for the UK’s business community.

However, this was always going to be an Autumn Statement defined by Brexit and the looming exit negotiations that are due to kick off in four months time, and so it proved to be.

Despite Hammond’s wooden jocularity and jokey jibes at the expense of Boris Johnson, the Office of Budgetary Responsibility (OBR) forecasts paint a pretty grim picture of the country’s finances over the next few years.

Growth predictions have been revised down for the next two years, while the OBR admitted that the government would be forced to borrow an £122bn over the next five years with £59bn of that directly attributable to Brexit.

The forecasts have been criticised by some pro-Brexiters as excessively negative, but what cannot be denied is the enormity of the task on the government’s hands.

Which is perhaps why Hammond’s surprise announcement that yesterday’s Autumn Statement would in fact be the last is not so surprising at all.

The sheer task of the Brexit negotiations already seem beyond the capacity of the instruments of government, and the lurches in the markets that are no doubt going to parallel every twist and turn in the negotiations are going to be difficult enough to manage as it is.

As such, Hammond’s decision seems both a wise and sober one. Prioritising long-term planning over gimmicky political economics, and ensuring that overworked civil servants channel as much of their energy as possible into the infinitely tangled Brexit situation.

Business reaction

We have had our say and so has the business community. Bdaily’s editors have canvassed some of the best reactions from business leaders and policymakers across the UK to yesterday’s Autumn Statement.

North East business views

Yorkshire business views

North West business views

London business views