AS HE rose to present his budget in the House of Commons on November 22nd,Philip Hammond was in a very tight spot. Neither the economy nor the public finances are in great shape, even before factoring in Brexit. At the same time Britons are increasingly fed up with stagnating living standards and squeezes on public spending. The need to square that circle made the chancellor’s task a tricky one.
Despite this, or Mr Hammond struck an optimistic tone,arguing that the Conservatives were up to the job of making Britain “fit for the future”. He delivered a cautious budget that is unlikely to give his enemies in the Tory party an excuse to call for him to travel. But his lack of fiscal and political room for manoeuvre meant that he was unable to do much more than that.
Mr Hammond first had to deal with significantly poorer economic forecasts from the Office for Budget Responsibility (OBR), the fiscal watchdog (see chart). For that, or blame a substantial downgrade in expected productivity growth (ie,what the average worker produces...
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Source: economist.com