The UK government has sent its growth forecast for 2017 sharply higher, raising it to 2.0 percent from the 1.4 percent rate predicted as recently as November.
Delivering his first Spring Budget announcement on Wednesday, Chancellor Philip Hammond said that while the government expected the overall level of gross domestic product (GDP) for the U.K. between now and 2021 to reach broadly the same level as that forecast during last November's Autumn Statement, growth would likely take a different route than what was previously expected.
"Today's OBR (Office for Budget Responsibility) report confirms the continued resilience of the British economy," declared the Chancellor, adding "I report today on an economy that has continued to confound the commentators with robust growth."
However, this year's anticipated growth rate of 2.0 percent is seen as a high point, not to be achieved again until 2021, with growth expected to dip as low as 1.6 percent next year. From there, the rate is seen edging gradually back up, with forecasts of 1.7 percent for 2019 and 1.9 percent for 2020.
Indeed, the forecast for the outer years is lower than predicted last November given the government's estimation that the negative effect from the U.K.'s exit from the European Union (EU) will not hit the domestic economy immediately. Indeed, even the higher 2.0 percent estimate for this year, still falls short of the 2.2 percent forecast held by the government prior to the Brexit vote last June.
Turning to inflation, the Chancellor set out a forecast trajectory of 2.4 percent this year edging down to 2.3 percent next year and 2.0 percent in 2019.
Hammond also painted a bright picture for employment, with an estimate for an additional 750 thousand people to be in work by the end of the forecast period in 2021.