Page 10 - ARUBA TODAY

A10 WORLD NEWS
Wednesday 22 november 2017

UK budget likely to prepare state finances for Brexit shock

By DANICA KIRKA pressure to show the coun- rising numbers of patients.
Associated Press try’s finances are strong “Given the major uncer-
LONDON (AP) — Britain’s as Britain braces for the tainties facing the econ-
Treasury chief is likely to shock of leaving the Euro- omy centered on Brexit,
ignore demands that the pean Union. That leaves Mr. Hammond is report-
government ease seven him little room for spend- edly concerned that inves-
years of austerity when ing increases, even after a tor confidence in the U.K.
he unveils the budget year in which the heroism could be seriously dam-
Wednesday, opting in- of police and firefighters fu- aged if he abandons the
stead to keep a tight rein eled calls to end the pub- fiscal framework adopted
on spending as economic lic sector pay cap, teach- only a year ago,” said
growth slows and the coun- ers marched to demand Howard Archer, chief eco-
try prepares for the impact increased school funding nomic adviser for the EY
of Brexit. and the National Health Item Club.
Philip Hammond is under Service struggled to treat A year ago, Prime Minister

Britain’s Chancellor Philip Hammond walks out of 11 Downing
Street in London. Britain’s Treasury chief is likely to ignore de-
mands that the government ease seven years of austerity when
he unveils the budget Wednesday Nov. 22, 2017, opting instead
to keep a tight rein on spending as economic growth slows and
the country prepares for the impact of Brexit.
(AP Photo/Frank Augstein)
Theresa May’s Conserva- 40 percent in 2007, the Of-
tive-led government was fice for National Statistics
touting the fact that Brit- said Tuesday. At the same
ain had one of the fastest- time, the Office of Budget
growing economies in the Responsibility has warned
developed world. But now that it will cut its forecast for
the economy is slowing, productivity over the next
partly as a result of uncer- five years. That is expect-
tainty linked to Brexit, and ed to mean lower tax rev-
that is undermining the enues and make it harder
growth many hoped would for Hammond to ease aus-
spur tax revenue and fund terity and boost public sec-
increased spending. tor pay. A flurry of relatively
Britain’s economy grew at inexpensive initiatives is
an annual rate of 1.5 per- likely to attempt to deflect
cent in the third quarter, media attention from the
compared with the euro- somber news. Hammond
zone’s 2.5 percent. will promise to spur techno-
The gloomy outlook comes logical innovation by fund-
as public finances are ing artificial intelligence re-
weakening. Public bor- search, electric car charg-
rowing jumped to 8 billion ing points and digital skills.
pounds in October, above Britain’s ongoing housing
predictions of 7.5 billion, shortage is also likely to fig-
driven by higher borrow- ure large, said Kallum Pick-
ing costs. Borrowing is at a ering, senior U.K. Economist
similar level to that before at Berenberg. “The hous-
the 2007-2008 financial cri- ing market is the Achilles’
sis, the House of Commons heel of the U.K. economy.
said in a statement re- The decades-long deficit in
leased ahead of the bud- annual house building has
get. contributed significantly to
Public sector net debt the rise in household debt
now totals 87.2 percent of and wealth inequality,” he
gross domestic product, said, adding that the prob-
compared with less than lem isn’t simple to fix.q