At next week’s Autumn Statement Chancellor Phillip Hammond is due to announce that the UK faces a £100bn budget hole for Brexit within five years. It is expected that official forecasts will show that slower growth and reduced levels of investment will have a significant impact on tax revenues, supporting the Treasury’s pre-referendum warning that a vote to leave the European Union would bring long-term economic costs for the UK. Mr Hammond is also expected to say that the borrowing forecast for each year will increase, representing a significant departure from former chancellor George Osborne’s positive outlook for the coming years before the referendum result. The Financial Times has explained the projected outlook as follows – “The consensus of independent economic forecasts, which are generally close to the Office for Budget Responsibility (OBR), show mediocre growth until 2020 with higher inflation and weaker business investment combining to slow revenues to the exchequer – once converted by the OBR into likely tax revenues, the deterioration in the public finances will cumulate to about £100bn”.
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