UK’s Javid plans first post-Brexit budget on November 6
LONDON – Finance minister Sajid Javid said on Monday he planned to deliver Britain’s first post-Brexit budget statement on Nov. 6, less than a week after the country’s deadline for leaving the European Union, if it exits with a deal.
“I will be setting out our plan to shape the economy for the future and triggering the start of our infrastructure revolution,” Javid said in a statement.
However, in the event of a no-deal Brexit – which would cause a major shock to the world’s fifth-biggest economy – the government would act quickly to outline its approach and “take early action to support the economy, businesses and households”, followed by a budget in the weeks after, the government said.
Prime Minister Boris Johnson says he will take Britain out of the EU on Oct. 31, if necessary without a transition deal to soften the economic turmoil.
But lawmakers have passed legislation aimed at forcing him to seek a delay if there is no transition.
The opposition Labour Party said the budget announcement would probably be aimed at wooing voters before an early election that Johnson is demanding.
“We expect more of the same. An electioneering stunt rather than a budget to rebuild our stalling economy and reset the direction of our country,” John McDonnell, Labour’s top finance official, said.
Javid, who took office in July, has already announced the biggest increase in day-to-day public spending in 15 years, putting borrowing on course to overshoot a cap set by his predecessor, Philip Hammond.
Javid has suggested he is prepared to borrow more in the future to take advantage of record-low borrowing costs.
Britain has steadily cut its budget deficit from almost 10% of gross domestic product in 2010 to just under 2% now.
But analysts have warned that Javid could end up weakening Britain’s budget credibility by making big spending pledges at a time when the economy has slowed and the outcome of Brexit remains so unclear.
Public debt has more than doubled since before the financial crisis to more than 80% of gross domestic product.
Like the government, the Bank of England also faces limits on how much help it can give the economy.
Some BoE policymakers have suggested they would support a cut to interest rates in the event of a no-deal Brexit, or even if there is another delay to the deadline for leaving the EU.
But Deputy Governor Dave Ramsden said in a newspaper interview published on Sunday that Britain’s economy had been so damaged by uncertainty about Brexit that it could hamper the BoE’s ability to help it.
(Content & Photos Syndicated Via Reuters)
(Writing by William Schomberg; Editing by Kate Holton and Alison Williams)