Spring Statement 2018: expectations
12th March 2018
Philip Hammond is expected to resist temptation to make significant changes for the sake of it as the chancellor prepares to deliver his first Spring Statement on Tuesday 13 March 2018.
"No other major economy makes hundreds of tax changes twice a year, and neither should we", he said while delivering his Autumn Statement 2016.
The Treasury reinforced that declaration in the weeks leading up to Spring Statement 2018, with insiders suggesting the speech is only expected to last up to 20 minutes.
That means it's fair to expect no major tax changes or spending commitments in Spring Statement 2018, especially as the economic forecasts look a lot less gloomy.
Response to OBR forecasts
Instead of a second major fiscal announcement of the year, all of the focus appears to be on growth forecasts provided by the Office for Budget Responsibility (OBR).
The forecasts could provide some good news for the UK's economic outlook, and for the chancellor.
After government borrowing was revised down from £58 billion to £50 billion in November 2017, the Institute for Fiscal Studies predicts it could be further reduced in light of stronger than expected tax receipts.
If borrowing comes in below £41 billion, this would mean a surplus on the current budget for the first time since 2001/02.
It's also possible that the OBR could upgrade its forecast for GDP growth, following raised expectations from other prominent forecasters.
It's likely that consultations on potential new policies will be released in Spring Statement 2018.
According to HM Treasury, these could address longer-term fiscal challenges, leaving plenty of time for scrutiny by the government and stakeholders before possible inclusion in Autumn Budget 2018.
A full Spring Statement report is available on our website.