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Hammond Budget Expected, Political Uncertainties Abound

By Patrick Higgins  |  22/11/2017 14:20
Political enemies of all colours watch from the sidelines.

Chancellor Philip Hammond will unveil a government budget today at 12:30 GMT, aimed at boosting slow economic growth and safeguarding British finances from further Brexit shock.

The budget is projected to be standard, with attention to budgetary constraints and spurs to improve British productivity and moderately rates of housing construction expected. Some attempts to increase economic productivity, in the world's slowest-growing developed economy, include higher spending on research and infrastructure. This includes 42 million pounds for teacher training and 177 million pounds for the development of higher maths programmes in schools.

The attempt at a balanced budget comes at a critical time for the UK. Britain’s economic outlook looks to be continually weaker and weaker, due to the constraints of shoddy productivity increases and Brexit. Furthermore, with a looming EU divorce fee of tens of billions of pounds, Hammond’s stance on fiscal responsibility may be more of an economic detriment.

Despite fiscal cutbacks in recent years, Britain’s debt now stands at 80% of total GDP, double what it was before the Great Recession. This is heavily contrasted with the fact that the British budget deficit has been greatly reduced. Chancellor Hammond is committed to reducing the deficit further to 1-2% of GDP by 2020/21, but if such cuts will occur remains to be seen, as the Chancellor continues to be attacked from all sides politically.

Within these budget issues, Chancellor Hammond seems to be fighting for his political relevance, as repeated clashes with Prime Minister May and barely-concealed pressure to quit from MPs from within the Conservative Party have hampered Hammond’s attempts to properly manage the British economy. Furthermore, his insistence on remaining, “fiscal,” puts him at odds with Prime Minister May’s plan to speed-up housing policy, as well as his timidity to negotiate with Brussels over the exact amount of money which will be paid to the EU during the Brexit process. On top of this, with a weak minority government and losing voters to the Labour Party, Chancellor Hammond’s insistence on small-spending and stretched out over time, in a Brexit age where economic uncertainty is likely to be prevalent through the next few years, is absolutely dead-weight to the Conservatives if they hope to remain in power. We shall see what Hammond’s budget truly consists of upon its release, and if it will be enough to prevent the Chancellor’s departure from government

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