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IN THE NEWS March 2018 The Spring Statement. Chancellor Philip Hammond revealed that the economy is expected to grow more strongly than expected in his first revamped Spring Statement. The chancellor said he was ‘positively Tigger-like’ as he announced upgraded forecasts for growth and borrowing - though many economists are not so upbeat. As promised, the chancellor resisted the temptation to tinker with tax, savings or pensions. However, he announced a number of consultations and calls for evidence designed to focus on how the tax system can be improved and how it can contribute to greening the economy - for example by tackling the problem of plastic waste. Other papers published deal with such topics as taxing the digital economy, exploring ways of encouraging innovation, promoting training and investment in human capital. However, his main focus was on the economy. The economy Here are the views from one of our Investment Partners - ‘The chancellor passed on a set of mostly harmless fiscal reports and announced the government would listen to views on a range of topics. With no new announcements the economy remains in a stable condition. Growth estimates were revised higher but remain very low by historical standards. The Office for Budget Responsibility (OBR) agreed with the Bank of England that real wages ought to turn positive next quarter but this has more to do with a fall in inflation than an acceleration in wage growth. As the chancellor said, these forecasts are there to be beaten and whether that happens depends upon whether productivity picks up. However, as the government is busy trying to manage Brexit and balance the budgets the chancellor didn’t unveil many productivity enhancing initiatives. Instead he is consulting with business over the fair collection of taxes on digital businesses and the increasing use of digital payments. This reflects his perception that markets, rather than politicians, create productivity. It would only take small tweaks to assumptions to transform the economic picture for the UK, although those tweaks could be negative or positive. The government has a big job on its hands managing Brexit. It sounds increasingly as if much will still be unresolved in that process by the Budget in Autumn. Perhaps that’s why the chancellor wears his frugality as a badge of honour. The key points The OBR has increased its GDP growth forecast for 2018 to 1.5% from 1.4% previously. Forecast growth is then unchanged at 1.3% in 2019 and 2020, before picking up to 1.4% in 2021 and 1.5% in 2022. Inflation, which is currently above target at 3%, is expected to fall back to target over the next 12 months. Borrowing is now forecast to be £45.2bn this year, £4.7bn lower than forecast in November. The more favourable outlook for borrowing means the debt forecast is nearly 1% lower than in November. Peaking at 85.6% of GDP in 2017-18, it is expected to fall to 85.5% in 2018-19, then 85.1%, 82.1%, 78.3%, and finally 77.9% in 2022-23. Prepare for the new tax year In the absence of any major tax announcements, we think this is an opportune time to remind you to make the most of the tax allowances that already exist. With only a VERY short while left until the end of the tax year, time is running out to use what, in some cases, are very generous allowances. Go to this page of our website to see what you need to know. As always, if any of the above prompts any questions, please do not hesitate to contact us . Our thanks go to Brewin Dolphin with their help with this article.