Britain facing annual budget in shadow of Brexit

Finance minister Philip Hammond will deliver his annual tax and spend plans before parliament at 1230 GMT.

Chancellor of the Exchequer Hammond will vow to “invest to secure a bright future for Britain” according to excerpts of his keynote speech, in a hint he may be ready to start bringing down the curtain on unpopular austerity.

Hammond is under pressure to deliver an eye-catching budget after Brexit spats with cabinet colleagues — and following Prime Minister Theresa May’s botched general election earlier this year.

He will pledge to build “a Britain fit for the future” in his second budget statement, but has already dampened expectations about the end of austerity — insisting that the budget measures will be “balanced”.

The Chancellor faces calls for bold action, but is hampered by Britain’s faltering economy, its stuttering productivity and high inflation that is stretching household incomes.

Uncertainty meanwhile lingers over the nature of Britain’s departure from the European Union, due in March 2019.

On the eve of the budget, official data showed Britain’s public finances worsened unexpectedly last month.

Public sector net borrowing, the government’s preferred measure of the deficit, rose to £8.0 billion ($10.6 billion, 9.0 billion euros) in October on soaring debt-interest payments.

Hammond will likely lift his annual borrowing targets and cut economic growth forecasts on Wednesday.

“In focus today will be the UK autumn budget and what Chancellor Hammond does or does not give away, given the fiscal constraints he faces in preparing the economy for Brexit,” said Accendo Markets analyst Michael van Dulken.

“Housebuilders may get a boost from policies designed to attract younger voters.”

The chancellor is meanwhile set to announce a pay rise for state-paid nurses after unveiling similar increases for police and prison officers, signalling a shift away from the austerity policies that have dominated since the 2008 financial crash.

– Housing boost? –

Hammond will also boost housing expenditure in the wake of the Grenfell Tower fire disaster that killed 71 people earlier this year.

He is set to announce plans to build 300,000 homes every year, unveiling billions of pounds of investment alongside new powers and planning rules, according to reports.

In addition, he will unveil a £1.7-billion investment to improve transport links.

Wednesday’s flagship budget comes after May’s right-wing Conservatives lost their parliamentary majority in a snap general election in June.

In contrast, the main opposition leftist Labour Party under leader Jeremy Corbyn gained a ringing endorsement of its anti-austerity policies.