Chancellor cuts growth forecasts, announces £23bn ‘productivity fund’

Added 23rd November 2016

In delivering his Autumn Statement this afternoon Chancellor of the Exchequer Philip Hammond announced cuts to growth forecasts and a £23bn fund to tackle a lack of productivity in the British economy.

Chancellor cuts growth forecasts, announces £23bn ‘productivity fund’

Hammond said the Office for Budget Responsibility has revised its growth projection for the UK economy in 2017 down to 1.4% from 2.2% and to 1.7% in 2018 from 2.1%. Projections for 2019 and 2020 were unchanged at 2.1%.

While noting the ‘strength and resilience’ the economy has shown since the Brexit vote, Hammond explained that the uncertainty generated by the upcoming exit process is expected to have a significant impact.

He also formally abandoned the government target to achieve a budget surplus by 2020 trumpeted by his predecessor George Osborne. Borrowing will be £68.2bn this year, followed by £59bn next year, £46.5bn in 2018 and £21.9bn in 2019, Hammond said. Overall public sector net borrowing will fall from 4% of GDP last year to 3.5% this year.

Another notable aspect of the address was Hammond bemoaning the gap between the productivity of British workers and counterparts elsewhere. He said the UK lags behind the US and Germany by 30%, France by 20% and Italy by 8%.

Hammond also pointed to a big gap in productivity between the London area and other parts of the country.

A £400m boost to venture capital spending delivered via the British Business Bank, a £2.3bn housing infrastructure fund to help provide 100,000 new homes in high demand areas and £1.4bn to fund 40,000 new 'affordable homes' were other notable announcements.

The Chancellor also confirmed an expected change in how he will report to the country. The Budget will be delivered in Autumn from 2018, and a lighter-weight statement delivered in Spring each year instead. 


Kames Income Hub


Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Premier Multi Asset Global Growth - Alex Farlow
Premier Multi Asset Global...

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Alex Sebastian

News editor

Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.



Investment Strategy




PA Dublin October 2017
PA Dublin October 2017

Tuesday 10 October
Westbury Hotel, Dublin

PA US 2017
PA US 2017

Tuesday 17 October
Furniture Makers' Hall

PA Channel Islands November 2017
PA Channel Islands November 2017

Tuesday 14 November
Royal Yacht Hotel, Jersey

PA Alternative Ucits November 2017
PA Alternative Ucits November 2017

Tuesday 7 November 
Furniture Makers' Hall

Sponsored Content