‘Light at the end of the tunnel’ but no end to austerity

Lower than expected borrowing and higher than predicted GDP growth last year will bring a note of optimism, but Philip Hammond has already suggested it is too early to take his foot off the austerity brake.

At the weekend he said: “There is light at the end of the tunnel because what we are about to see is debt starting to fall after it has been growing for 17 continuous years.

“That is a very important moment for us but we are still in the tunnel at the moment.”

:: Chancellor wants more belt tightening

The Office for Budget Responsibility’s forecasts for the deficit, debt, GDP and productivity will form the backbone of the statement.

Last month the OBR said 2017/18 borrowing would be around £43bn rather than the £49.9bn forecast last November.

Mr Hammond has said he will not use the statement to announce any tax or spending plans, but Labour has called on him to “end the financial crisis in our public sector”.

Shadow chancellor John McDonnell said: “Our public services are at breaking point and many of our local councils are near bankruptcy.

“He needs to listen to the calls from across the political spectrum – including the Tory council leader in his own constituency – to end the financial crisis in our public sector.

“Philip Hammond must use today to act and end austerity.

“Our country cannot afford for him to continue to ignore the problems facing working households in our country.”

Mr Hammond is expected to speak for less than half an hour.

His deputy Liz Truss said there would be “no red box, no rabbits out of the hat and no tax changes”.

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