Chancellor Philip Hammond is unlikey to offer any tax giveways in next week’s Spring Statement, experts say.
Economists believe the Office for Budget Responsibility (OBR) – the UK’s fiscal watchdog – will nudge up near-term economic growth forecasts, while slashing UK Government borrowing for 2017-18 by as much as £7billion.
But Mr Hammond is widely expected to bank the windfall as a much-needed buffer, with the impact of Britain’s EU divorce bill on public finances likely to be laid bare for the first time alongside the statement.
With the focus firmly on the economic forecasts and Brexit bill, the Spring Statement on Tuesday is otherwise expected to be a non-event after the chancellor made clear he wants to keep major announcements to the main Budget, which he has moved to November.
Economic research consultancy Pantheon Macroeconomics is forecasting borrowing to be cut to £43billion for the year to the end of March, down from the £49.9billion predicted by the OBR in November. Official figures for January showed the second highest surplus since records began, thanks to a bumper haul of tax receipts.
Pantheon’s Samuel Tombs said: “We expect the chancellor to bank his windfall and reassess in the autumn, when the Brexit and political outlook should be clearer.”
PwC chief economist John Hawksworth predicted “significant tax and spending announcements” in November.