Spring Statement expectations

It's less than a fortnight until chancellor Philip Hammond delivers Spring Statement 2018, and the Treasury has already played down what we can expect.

According to Treasury insiders, there will be "no red box, no official document, no spending increases, no tax changes" when the speech is made on Tuesday, 13 March 2018.

The speech, which is only expected to last 15 to 20 minutes, won't take place in its usual slot after prime minister's questions as Hammond moves away from 2 major fiscal statements a year.

Delivering Autumn Statement 2016, Hammond said:

"No other major economy makes hundreds of tax changes twice a year, and neither should we."

What can we expect?

In comparison to previous statements, it seems very little change will be announced in Spring Statement 2018.

According to a Treasury official, "there will be no major tax or spending packages, but the opportunity to revise direction of travel and take calls for views".

However, there's still room for adjustments to upcoming measures if needed.

Revisiting Hammond's Autumn Statement 2016, the chancellor said he would only announce tax changes in the Spring Statement "if unexpected changes in the economy require it".

Response to the OBR forecasts

Instead of a second major fiscal announcement of the year, all of the focus appears to be on growth forecasts provided by the Office for Budget Responsibility (OBR).

The OBR is required to publish 2 sets of forecasts a year and, with the most recent outlook published in November 2017, an updated forecast is due in Spring Statement 2018.

The chancellor's response to them is likely to form the majority of the statement.

A better economic and fiscal outlook?

In the November 2017 forecasts, the OBR downgraded their expectations for productivity growth, business investment and GDP growth.

However, better-than-expected economic performance in recent months could prompt the OBR to perform a U-turn on these predictions in its next set of forecasts.

The Confederation of British Industry reported particularly strong growth in the services sector during the 3 months to February 2018, with the first rise in profits since November 2015.

Additionally, the Office for National Statistics (ONS) found that productivity growth was at its strongest since 2008 in the second half of 2017.

Public sector borrowing was forecast to be £49.9 billion over the 2017/18 financial year, but ONS figures suggest the government is now on track to borrow around £45 billion.

The OBR will probably make some adjustments in light of these developments, but it remains to be seen which indicators are significant enough for forecasts to be revised up, and by how much.


One of the reasons for the change to the system of financial announcements was to allow the government and stakeholders more time to scrutinise proposed policy and prepare for changes.

This means it's likely that consultations on new policies will be released at the time of the Spring Statement, leaving plenty of time for them to be scrutinised.