Chancellor confirms three-year Spending Review imminent subject to a Brexit deal

Chancellor confirms three-year Spending Review imminent subject to a Brexit deal

The money should help Britain offset an economic slowdown caused by uncertainty over how Brexit will be resolved.

"Leaving with no deal would mean significant disruption in the short and medium term and a smaller, less prosperous economy in the long term, than if we leave with a deal", Mr Hammond said in his speech to parliament.

In documents released alongside Chancellor Philip Hammond's Spring Statement, the Office for Budget Responsibility (OBR) said growth in the United Kingdom and global economies had slowed since October's Budget, leading to a downgrade in its short-term forecasts.

The Bank has also slashed this year's growth forecast to 1.2% - the lowest since 2009, when the economy contracted by 4.2% at the height of the recession following the financial crisis.

However, Britain's independent budget forecasters said nearly half of Hammond's fiscal headroom might be lost, depending on how official statisticians treat student loans in the public accounts.

Still, Hammond said borrowing will be at its lowest level in 22 years.

"I hoped we would do that last night, but I am confident that we, as a House, will do it over the coming weeks", he said.

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

The OBR said a recent run of disappointing economic data in both the United Kingdom and other major economies had also weighed on expectations.

Yet, while he said the forthcoming Spending Review, supposedly spanning three years, will encompass policing as well as social care, education and local government, there was a clear caveat. The estimate for 2023 remains unchanged at 1.6%.

Lawmakers were expected to vote later on Wednesday against a leaving the European Union without a transition deal, then vote on Thursday on seeking a delay to Britain's departure, now scheduled for March 29.

While Brexit matters, it is not the only thing that matters, he said. "So, there will still be Brexit-related uncertainty".

"This is up from £15.4 billion in October, as the fiscal costs of the temporary near-term cyclical weakness of the economy have been swamped by the fiscal gains from higher income tax and lower debt interest spending".

Borrowing will fall from £29.3 billion (RM157.85 billion) in 2019-20, compared to a forecast of £31.8 billion in October.

The Chancellor told MPs that the OBR also expects 600,000 additional jobs to be generated by 2023, reaching a total of 33.2 million people in employment.

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