UK budget hands firms £3bn Brexit support as growth forecast slashed
UK economic growth forecasts have been slashed on the back of poor productivity as the government forks out an extra £3bn to get firms Brexit-ready.
The British economy is now expected to grow by 1.5pc this year - down from an earlier forecast of 2pc - and 1.4pc in 2018, compared with a previous forecast of 1.6pc.
Growth forecasts in 2019 and 2020 were both 1.3pc compared with 1.7pc and 1.9pc forecast in March.
UK Chancellor Philip Hammond laid out the growth forecasts as he unveiled his Government's Autumn Budget. He declared Britain outside of the EU faced a future full of challenges and opportunities.
Mr Hammond also said he expected the Government to have to borrow more in the coming years. The country is expected to run a budget deficit of 1.3pc of GDP by the 2021/22 financial year, almost double the previous estimate of 0.7pc. Before last year's Brexit vote, the UK had been aiming to post a budget surplus by the end of this decade.
Mr Hammond also unveiled another £3bn to help businesses prepare for Brexit, and noted the formal Brexit talks process was entering a "critical phase".
"While we work to achieve this deep and special partnership we are determined to ensure that the country is prepared for every possible outcome," Mr Hammond said.
"We have already invested almost £700m in Brexit preparations.
"Today I am setting aside over the next two years another £3bn and I stand ready to allocate further sums if and when needed."
The Budget also set aside £650m for a Northern Ireland Executive - which currently doesn't exist. Mr Hammond also said that the UK government will open negotiations for a Belfast City Deal as part of "our commitment to a comprehensive and ambitious set of city deals across Northern Ireland". No mention was made of a similar deal for Derry, for which the SDLP argued it has been long campaigning.
Rob Heron, tax partner at EY, welcomed the extra cash for Brexit readiness.
"One of the key concerns of Northern Irish business is the efficient movement of goods across the Border with the Republic of Ireland," he said. "It is vital that a significant portion of this funding is targeted at customs preparations to ensure the ease of movement of goods into and out of the UK post-Brexit."