Britain is ramping up its borrowing forecasts and cutting its growth outlook as the economy slows in the wake of the Brexit vote, UK finance minister Philip Hammond said in the country's first budget plan since voters decided to leave the European Union. ROUGH CUT - NO REPORTER NARRATION.
ROUGH CUT (NO REPORTER NARRATION) Britain ramped up its borrowing forecasts on Wednesday (November 23) as the economy slows in the wake of the Brexit vote, finance minister Philip Hammond said in the country's first budget plan since voters decided to leave the European Union. Britain will need to borrow 122 billion pounds more over the next five years than it expected before voters decided to leave the EU in June, Hammond said. The net public sector debt is forecast to hit a peak of 90.2 percent of economic output in 2017/18, he said. The Office for Budget Responsibility, Britain's independent budget forecasters, said gross domestic product would grow by 1.4 percent in 2017, down from an estimate of 2.2 percent made in March, before voters decided to leave the EU. Hammond, announcing the first detailed economic plans of May's government, said the OBR believes uncertainty about Britain's trading relationships with its EU neighbours - who buy nearly half the country's exports - will cut growth by 2.4 percentage points over coming years. SOUNDBITES: UK FINANCE MINISTER PHILIP HAMMOND SAYING: "It's a privilege to report today on an economy which the IMF predicts will be the fastest growing major economy in the world this year." "Our task now is to prepare our economy to be resilient as we exit the EU and match-fit for the transition that will follow. So we will maintain our commitment to fiscal discipline while recognising the need..... While recognising the need for investment to drive productivity." "Today's OBR forecast is for growth to be 2.1 per cent in 2016; higher than forecast in March. In 2017, the OBR forecast growth to slow to 1.4 per cent, which they attribute to lower investment and weaker consumer demand driven respectively by greater uncertainty and higher inflation resulting from sterling depreciation." "The OBR forecasts that debt will rise from 84.2 per cent of GDP last year to 87.3 per cent this year, peaking at 90.2 per cent in 2017/18 as the Bank of England's monetary policy interventions approach their full effect." "In view of the uncertainty facing the economy and in the face of slower growth forecasts we no longer seek to deliver a surplus in 2019/2020." "We lag the US and Germany by some 30 percentage points in productivity. But we also lag France by some 20 points and Italy by eight points, which means in the real world, it takes a German worker four days to produce what we make in five." "When we took office in 2010, public spending was 45 per cent of GDP. This year, it is set to 40 per cent."