Spring Budget 2017: OBR ties Hammond’s hands

The Office for Budget Responsibility’s caution on both the economic and fiscal outlook limited the Chancellor’s room for manoeuvre in this last spring Budget. But he still has a little room to loosen the purse strings later this year or beyond if the economy requires additional support. This was a steady-as-she-goes Budget that announced no new initiatives of major macroeconomic or financial significance. In a broadly neutral package, a small giveaway this year, mainly reflecting higher social care funding, was offset for by higher taxes on the self-employed in later years. The economy’s recent resilience had fuelled expectations that public borrowing would fall back substantially, handing the Chancellor a sizeable “war chest” with which to protect the economy from Brexit uncertainties. But while the OBR raised its near-term growth forecasts, it judged that the negative impact of Brexit has been delayed, rather than diminished.