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The Autumn Statement – A success or a disaster?

Posted by
12 Dec 2016
As a keen political observer, the Autumn Statement was the first real chance to see Philip Hammond in action. Would this initial test be a major success or one best forgotten? The honest answer to this is surely to wait and see. 

There can be no doubt that Brexit and the economic uncertainty of the UK is at the forefront of most people’s minds. The Bank of England and Mark Carney has re-iterated that as a result of Brexit we have some uncertain times ahead with rising inflation, a falling pound and a reduction in economic growth. How would Hammond confront these issues and would he be able to deliver on the questions people want the answers to?

Well the speech began in gloomy fashion with the announcement that the UK’s finances will be up to £122 billion worse off, the UK’s debt will rise and the growth forecasts are well down compared to expectations. But given the uncertainty of the speech several positive points were discussed, such as the £1 billion plus investment in roads, the additional assistance on offer for fledgling UK firms and the increase in the national minimum wage. 

Most market experts recognised that Hammond ‘was almost in a no win situation’ as he had very little wriggle room given the recent economic changes. The major issues that he needed to re-assure the public on centred around delivering a plan that would strengthen the resilience of the UK economy in a turbulent worldwide marketplace. 

But did he deliver on this? Michael Kitson (Senior Economics Lecturer at Cambridge business school) stated:

Hammond acknowledged that the government will fail to achieve its fiscal targets and the monetary policy is running out of steam. A preoccupation with ‘balancing the book’ makes sense for a household, but not for an economy that is suffering from a severe lack of investment.

I personally agree with Kitson; he clearly states that the government needed a bolder plan that can promote growth and free us from the potential of another damaging recession. From a personal perspective I’ve personally been a big supporter of the Conservative government over the last few years. They have seen us through the back end of a crippling recession and have brought the vast majority of the country into more prosperous times. Although in my opinion, the current leadership leaves a lot to be desired.

Theresa May and her colleague seem clueless on all economic issues linked to Brexit. They need to make the decision on free trade and the free movement of people. It is clear that European leaders are not going to make life easy for the UK – a hard Brexit means a hard Brexit and this personally scares me greatly.

So in answer to the initial question posed - I personally think that Hammond’s speech raised more questions than it quashed. Does he have the party have the gravitas to see us through the next four years? I personally don’t believe that they have. Cameron and Osbourne had many critics (me being one of them on certain issues) but I believed them to be the best combination to see us over this decade of immense change. May and Hammond have many tests ahead – I just hope they can rise to the challenge and see the British people through one of the trickiest periods since the last recession.

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Tagged In: Current Affairs, Finance
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