Productivity growth continues to be stagnant, resulting in the lowering of growth forecasts, Chancellor Philip Hammond has announced in his Budget today.
Hammond announced that the productivity estimates from the Office for Budget Responsibility had remained “stubbornly flat”, meaning that GDP growth will have to be revised down.
In 2017, growth is now expected to come in at 1.5 per cent, falling to 1.4 per cent in 2018.
Through 2019 and 2020, growth is set to fall again to 1.3 per cent, before picking up to 1.5 per cent in 2021 and then to 1.6 per cent in 2022.
Hammond added that inflation, currently running at 3 per cent, was set to return back towards the Bank of England’s target of 2 per cent over the next year, a trend that is unlikely to be welcomed by savers.
The Bank of England’s will continue to target 2 per cent inflation, Hammond announced.
Hammond said projections of the debt would continue to fall, however, in the “first sustained decline in debt in 17 years”.
He said: “Simply cannot be right to spend more on our debt interest than our police and armed forces combined.”