What to expect from the Autumn Statement

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Philip Hammond will give his first major fiscal announcement as Chancellor - and the first since the UK voted for Brexit - when he delivers the Autumn Statement on Wednesday.

What can we expect? Here are a few pointers:

Philip Hammond will deliver his first major fiscal announcement as Chancellor

Philip Hammond will deliver his first major fiscal announcement as Chancellor

Not much drama

George Osborne had a reputation for pulling a rabbit out of the hat when it came to major announcements, something to stick in big letters on newspaper front pages. Sometimes, the announcements came back to haunt him, but he always kept the headline writers happy. The current Chancellor has made clear there won’t be any magic on offer from him - he has warned that with an “eye watering” amount debt and the need for the economy to be “match fit” to deal with the uncertainty of Brexit, the Autumn Statement will be a modest set of announcements. Some reports have suggested the Chancellor wants to do away with the half-term mini-budget of the Autumn Statement altogether.

Brexit impact

The key figure will be the latest growth forecasts from the Office of Budget Responsibility (OBR), revealing the official view of how much worse off the public finances will be as a result of leaving the European Union. It has been suggested that Mr Hammond could have £100bn less to spend by 2020, with living standards hit by a rise in inflation of up to 4% by the end of next year. The Chancellor signalled a fiscal “re-set” when he took office, suggesting he will loosen or abandon Mr Osborne’s debt discipline, requiring the UK Government to run a surplus by the end of the current parliament

Support for JAMs

Theresa May said the focus of her premiership would be working families who are “just about managing” but struggling to get by in low-paid jobs. How the Chancellor chooses to reflect this focus is another area to watch. There have been calls for cuts to Universal Credit and new restrictions on child tax credits, which will hurt low-paid workers with children, to be reversed, and reports suggest there may be some form of limited rebate for them. Opposition parties will be looking to see whether more is returned to the lowest earners than is handed to the better-off in tax cuts through proposed increases in tax thresholds.

Stimulus and investment

The government has trailed a series of announcements ahead of the Autumn statement, designed new investment to boost productivity and stimulate investment and innovation. The Chancellor has committed to £1.3bn for new roads in England and £1bn to give more homes and businesses a “gold standard” fibre-optic Internet connection, allowing much faster web browsing speeds. The Prime Minister also unveiled investment worth £2bn in high-tech research. How this is marshalled into a coherent industrial strategy remains to be seen.

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