What's going on?
The UK’s finance minister on Wednesday delivered a mixed report on the health of the UK economy in the country’s annual spring budget.
What does this mean?
First, the good news: Philip Hammond, Britain’s head honcho of public finances, told the UK parliament that Britain’s economy is set to remain relatively robust this year, with growth expected to hit 2%! Also, he announced that the UK government is reducing its debt, which, as we’ve reported before, is typically important for the health of any major economy. But, the UK Treasury said economic growth would slow down in 2018 and 2019 to 1.6% and 1.7%, which would be more of a slowdown than previously expected.
Why should I care?
For you personally: Self-employed people will have to pay more tax.
There was some unexpected news from Wednesday’s budget: a provision that many self-employed workers use to lower their tax burden will be scaled back and their mandatory national insurance contributions will be increased (which many people think of as a tax, despite the government’s claims to the contrary).
The bigger picture: Budgeting for Brexit is a difficult proposition.
While the UK economy has performed far better in the wake of the Brexit vote than most economists expected, it’s almost certainly fair to say that the hard work is just beginning for Britain. Figuring out just how well (or poorly) the UK economy will fare during its divorce from the EU is, to say the least, difficult. The government even stated earlier this month that its forward-looking figures were subject to significant revision if the trade terms of Brexit deviate from current expectations in the upcoming months and years.