Published: Sat, March 16, 2019
Markets | By Otis Pena

United Kingdom watchdog puts Brexit war chest at £26.6b

United Kingdom watchdog puts Brexit war chest at £26.6b

Britain on Wednesday slashed its 2019 economic growth forecast, as finance minister Philip Hammond said lifting Brexit's "cloud of uncertainty" was parliament's "most urgent task".

Following the Chancellor's Spring Statement, the Office for Budget Responsibility (OBR) has published its fiscal and economic outlook, making revisions to an earlier report produced in October after the Budget.

But this depends on a Brexit deal being completed in the next few weeks and the "uncertainty that is hanging over our economy lifted".

Philip Hammond referred to the British economy as "remarkably robust" during today's Spring Statement.

Hammond also unveiled revisions to United Kingdom economic growth forecasts from the Office for Budget Responsibility, including reducing this year's estimate to just 1.2%.

Philip Smeaton, chief investment officer of Sanlam UK, said: "Despite the long shadow cast by the Brexit drama, Philip Hammond came to the House of Commons with positive news on tax receipts, meaning that the government is on course to have a smaller deficit in this financial year".

Theresa May's Brexit deal, which she agreed with Brussels at the end of 2018, was voted down for the second time on Tuesday evening.

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Former Australian prime minister Malcolm Turnbull wrote: 'Fraser Anning's comments today are contemptible. The man was filming on his phone as he smashed the egg on top of Mr Anning's head.

He added: "I need to be straight with the House: a no-deal Brexit would deliver a significant short- to medium-term reduction in the productive capacity of the British economy".

"Higher unemployment, lower wages, higher prices in the shops".

He said that it was "disappointing" that the chancellor had missed the opportunity to provide desperately-needed funding for local services, and added that Brexit can not be a distraction from the challenges facing our public services.

MPs were expected to vote later today against a no-deal Brexit and then vote on Thursday in favour of the government seeking a delay to Britain's departure, now scheduled for March 29.

Hammond revealed in his Spring Statement that the forecast for the country's growth in 2019 was 1.2 percent, the weakest since 2009, a sharp drop from the 1.6 percent predicted in the his budget last October.

Hammond said he now had 26.6 billion pounds of fiscal "headroom" that he has earmarked as a potential war chest for helping Britain's economy - for example, via extra spending or tax cuts - up from a previous estimate of 15.4 billion pounds.

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