The Office for Budget Responsibility (OBR) also revised its forecasted growth to 1.2%, down from the 1.6% predicted in the budget last year, and rising to 1.4% in 2020 and 1.6% in 2021 – but this growth is reliant on a meaningful Brexit deal being agreed.
Commenting on the statement, Stuart Law, CEO of Assetz Capital said: “As the chancellor of the exchequer himself was keen to point out, the statement’s promises of economic growth are rendered meaningless until the nature of Britain’s exit from the EU is more clearly defined.
“Hammond’s claim that inflation is on target will provide little comfort to savers when the banks are currently offering rates of return far below that target, and this trend is unlikely to be resolved in the near future.
Law continued: “The prolonged uncertainty only increases the chance that the Bank of England will drastically lower the base rate, leading banks to substantially reduce lending to businesses and even offer zero savings rates to retail customers to encourage spending.
“In these circumstances, a sharp economic downturn will be inevitable. From our perspective, we are confident that the peer-to-peer lending industry will thrive as investors and businesses alike are driven to the sector.”