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| Autumn Statement 2016: What to expect from Philip Hammond's first post-Brexit budget | |
| (about 2 hours later) | |
| Chancellor Philip Hammond will outline his priorities for taxes and spending in the wake of the UK's vote to leave in the EU in his Autumn Statement on Wednesday. | Chancellor Philip Hammond will outline his priorities for taxes and spending in the wake of the UK's vote to leave in the EU in his Autumn Statement on Wednesday. |
| It will be the Chancellor's first major economic speech since the Brexit vote in June. | It will be the Chancellor's first major economic speech since the Brexit vote in June. |
| The Office for Budget Responsibility (OBR), the government’s economic watchdog, will also reveal its latest forecast for growth, unemployment and inflation, as it gives its first official verdict on the outlook for post-Brexit Britain. | The Office for Budget Responsibility (OBR), the government’s economic watchdog, will also reveal its latest forecast for growth, unemployment and inflation, as it gives its first official verdict on the outlook for post-Brexit Britain. |
| The Autumn Statement will be followed by an immediate response from the Shadow Chancellor John McDonnell in the House of Commons. | The Autumn Statement will be followed by an immediate response from the Shadow Chancellor John McDonnell in the House of Commons. |
| Here's what we know about the content so far: | Here's what we know about the content so far: |
| Economists’ eyes will be on the updated forecasts from the OBR. | Economists’ eyes will be on the updated forecasts from the OBR. |
| The independent OBR will predict where Mr Hammond’s plans to take the UK economy, after abandoning his predecessor George Osborne’s pledge to eliminate the budget deficit by 2019-2020. | The independent OBR will predict where Mr Hammond’s plans to take the UK economy, after abandoning his predecessor George Osborne’s pledge to eliminate the budget deficit by 2019-2020. |
| The OBR will compare the March Budget forecasts for the size of the economy with the new ones to be published on Wednesday. It is likely to show the economy will be about 2 per cent smaller by 2019. It will also calculate the additional borrowing over the next five years. | The OBR will compare the March Budget forecasts for the size of the economy with the new ones to be published on Wednesday. It is likely to show the economy will be about 2 per cent smaller by 2019. It will also calculate the additional borrowing over the next five years. |
| The widely respected Institute for Fiscal Studies (IFS), has warned that the Government faces a £25bn black hole in the public finances by the end of the current parliament because of slower growth and higher inflation. | The widely respected Institute for Fiscal Studies (IFS), has warned that the Government faces a £25bn black hole in the public finances by the end of the current parliament because of slower growth and higher inflation. |
| The IFS believes Mr Hammond should "prepare for more austerity" in the next parliament. | The IFS believes Mr Hammond should "prepare for more austerity" in the next parliament. |
| Mr Hammond previously said: "We have eye-wateringly large debt. We still have a significant deficit in this country. We have to prepare the economy for the period that lies ahead. We have to make sure the economy is watertight." | Mr Hammond previously said: "We have eye-wateringly large debt. We still have a significant deficit in this country. We have to prepare the economy for the period that lies ahead. We have to make sure the economy is watertight." |
| Theresa May, in her first statement as prime minister, said she would directly address people from “an ordinary working-class family” who “don’t always have job security”, and “just about manage but worry about the cost of living” – a group who are thought to have voted disproportionately in favour of leaving the EU. | Theresa May, in her first statement as prime minister, said she would directly address people from “an ordinary working-class family” who “don’t always have job security”, and “just about manage but worry about the cost of living” – a group who are thought to have voted disproportionately in favour of leaving the EU. |
| Rob Holdsworth of the Resolution Foundation think-tank said: “Just managing families have had a tough decade. Their incomes started to stagnate before the financial crisis, fell during the downturn and despite recent growth, typical household incomes are no higher than a decade ago.” | Rob Holdsworth of the Resolution Foundation think-tank said: “Just managing families have had a tough decade. Their incomes started to stagnate before the financial crisis, fell during the downturn and despite recent growth, typical household incomes are no higher than a decade ago.” |
| “These families have also faced an additional squeeze over the past two decades – higher housing costs.” | “These families have also faced an additional squeeze over the past two decades – higher housing costs.” |
| The Autumn Statement is expected to free up some money to help families on modest income. | The Autumn Statement is expected to free up some money to help families on modest income. |
| Policies under consideration reportedly include reducing the burden of childcare. Mr Hammond’s Autumn Statement could also introduce a freeze in fuel duty, which would effectively scrap a planned 2p rise on a litre of petrol in another offer to motorists. | Policies under consideration reportedly include reducing the burden of childcare. Mr Hammond’s Autumn Statement could also introduce a freeze in fuel duty, which would effectively scrap a planned 2p rise on a litre of petrol in another offer to motorists. |
| Elsewhere, there have been widespread predictions of a cut in air passenger duty to reduce the cost of foreign holidays that have been sent spiralling higher due to the drop in the value of the pound. | Elsewhere, there have been widespread predictions of a cut in air passenger duty to reduce the cost of foreign holidays that have been sent spiralling higher due to the drop in the value of the pound. |
| Economist from EY said the Chancellor should also claw some money back by halting a planned cut in corporation tax, already the lowest among major economies, from 20 per cent to 17 per cent. | Economist from EY said the Chancellor should also claw some money back by halting a planned cut in corporation tax, already the lowest among major economies, from 20 per cent to 17 per cent. |
| “The Chancellor has said he intends to stick with the initial plan to cut corporation tax to 17 per cent by 2020 rather than opt for the further reduction mooted by his predecessor. If he does have funds to spend, he could look beyond corporation tax to a reduction in the employment tax burden, such as reducing the rate of employer National Insurance (NI) contributions to offset the increase in the apprenticeship levy,” EY economists said. | “The Chancellor has said he intends to stick with the initial plan to cut corporation tax to 17 per cent by 2020 rather than opt for the further reduction mooted by his predecessor. If he does have funds to spend, he could look beyond corporation tax to a reduction in the employment tax burden, such as reducing the rate of employer National Insurance (NI) contributions to offset the increase in the apprenticeship levy,” EY economists said. |
| But Theresa May threw that into doubt earlier this week when she said the UK aspired to retain the lowest corporation tax rate in the G20. If Donald Trump cuts America's rate to 15 per cent - as he has said he will - that would imply further cuts to the UK rate below 17 per cent. | But Theresa May threw that into doubt earlier this week when she said the UK aspired to retain the lowest corporation tax rate in the G20. If Donald Trump cuts America's rate to 15 per cent - as he has said he will - that would imply further cuts to the UK rate below 17 per cent. |
| Mr Hammond is expected to confirm £1.3bn of additional capital spending to upgrade Britain’s road network. | Mr Hammond is expected to confirm £1.3bn of additional capital spending to upgrade Britain’s road network. |
| This will be made up of £1.1bn on local schemes and £220m on easing the pressure on “pinch points”. | This will be made up of £1.1bn on local schemes and £220m on easing the pressure on “pinch points”. |
| The Treasury previously said investment in infrastructure and innovation to boost long-term economic growth would be “at the heart” of Wednesday's statement. | The Treasury previously said investment in infrastructure and innovation to boost long-term economic growth would be “at the heart” of Wednesday's statement. |
| The Chancellor, Philip Hammond, is expected to pledge £400m of public funds to extend the UK’s “full-fibre” broadband network. | The Chancellor, Philip Hammond, is expected to pledge £400m of public funds to extend the UK’s “full-fibre” broadband network. |
| The Treasury believes the funding will help at least two million more homes and business get full-fibre broadband, regarded as the future of high speed telecoms. | The Treasury believes the funding will help at least two million more homes and business get full-fibre broadband, regarded as the future of high speed telecoms. |