Wednesday, November 23, 2016

Brexit rips a hole in the state budget – FAZ – Frankfurter Allgemeine Zeitung

The government in London believes that as a result of the impending withdrawal of Britain from the EU, with less economic growth and a much larger budget hole than previously expected. The Chancellor of the exchequer, Philip Hammond, announced in its semi-annual budget speech to make in the next five years, a total of 122 billion pounds (144 billion) more debt than assumed in the spring. The previous plans to restore the public finances to be abandoned.

Marcus Theurer author: Marcus Theurer, economic correspondent, based in London.

At the same time, said Hammond, the government wants to ensure that more British than in the past the prosperity of the country. It is an economy should be created, “the all Good”. Politicians from the opposition Labour Party accused the government, however, that she was “unprepared” and have no Plan for the forthcoming Brexit. The UK wants to leave the EU, until the spring of 2019.

It is the first Time since the British EU Referendum in June that the new government in London called concrete forecasts of the expected economic and fiscal consequences of leaving the EU. In 2017, Hammond now only expects economic growth of 1.4 per cent instead of 2.2 per cent, and for 2018, with a rise of 1.7 percent instead of 2.1 percent growth. This year, however, the British economy is expected to expand by 2.1 percent, somewhat stronger than previously assumed. The UK was thus the Growth leader among the largest industrial countries. In its forecasts of Hammond is based on estimates by the independent budget Commission of the government.

the Chancellor of The exchequer promised to make the economy on the island of “resistance”. The Brexit vote will change “the course of British history”. It was now “more urgent than ever” to fight the persistent economic weaknesses of the country. The government wants to invest in the next five years, a total of 23 billion pounds to improve the “shocking bad” in labour productivity. The productivity – that is, the working time needed to produce a product – is a crucial factor for the long-term Prosperity. Experts have long commented that the UK has with Germany, France and other developed countries, a large residue.

The renovation of the state budget pushes the government on the long Bank: Hammond’s predecessor, George Osborne actually wanted to close by the end of the decade, the financial hole completely. The new Chancellor of the exchequer, since the summer in the office, however, said on Wednesday, a Surplus to be achieved after 2020, and “as early as practicable”. Alone in the current financial year, Hammond expects additional debt of 68 billion pounds, just under 13 billion more than expected in the spring. With a deficit of 3.5 percent of economic output the UK is holes in the industrialised countries with the largest Budget.

The larger deficit is the national debt mountain continues to grow: The government expected that the level of debt within five years 227 billion to 1,925 trillion pounds grows. In relation to the economic power of the state to increase debt from 84 percent last year up to 2018 to more than 90 percent. “We have decided to take on debt to invest,” said Hammond.

the Chancellor of The exchequer confirmed the controversial plans to tax relief companies: As announced last year, to reduce the corporate tax rate in the coming years from the current 20 percent to 17 percent. Thus, the British had control, the lowest among the 20 leading industrial and emerging countries (G20). German Finance Minister Wolfgang Schäuble has criticised the plans of the British this week, violently and in front of a downward spiral in the international business taxation warned. Hammond announced on Wednesday at the same time, to close a number of legal Tax loopholes for businesses.

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The government wants to help low-wage earners. The Chancellor of the exchequer announced that the statutory minimum wage will rise in April 2017 by 30 Pence to £ 7.50. Hammond is clinging to the plans of his predecessor Osborne, the General, the wage floor to set up.


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