The UK chancellor has given a downbeat assessment of the economy, saying that growth will slow more than expected as the country hurtles towards Brexit.
Philip Hammond revealed the deteriorating outlook in his Budget speech to Parliament on Wednesday, in which he also outlined cautious spending plans.
Britain's budget forecasters now expect gross domestic product to grow by 1.5 per cent this year, compared with a forecast of 2.0 per cent made in March, reflecting a slowdown as the Brexit vote weighs.
The Office for Budget Responsibility also cut its GDP growth forecasts in 2019 and 2020 to 1.3 per cent in both years. For 2021 and 2022, economic growth will remain weak at 1.5 and 1.6 per cent respectively.
It is the first time in a generation that growth is forecast to grow below 2% every year.
"There is a recognition from the OBR that the growth outlook is dire at a time when the world economy is enjoying a synchronised upswing. Germany is enjoying a boom and even Italy is growing faster than the UK," Daiwa Capital Markets Europe's Chris Scicluna said.
The OBR's pessimistic view on growth was based largely on a cut to its projections for productivity, the Achilles heel of Britain's economy since the global financial crisis, due to shortfalls in skills training and infrastructure.
Sterling initially fell as Mr Hammond announced the weaker forecasts for the economy, but rose later to hit a three-week high against the US dollar.
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Mr Hammond had been under pressure to use his Budget statement to turn around the fortunes of Prime Minister Theresa May. Some Conservative MPs, still smarting from an election mauling in June, had even called on Mrs May to fire him for his cautious approach to Brexit and to the public finances.
The chancellor set aside £3 billion to prepare for Brexit and offered a package of initiatives to build new homes, help first-time buyers and spend more on the heath service, but he otherwise sidestepped eye-popping initiatives.
He tried to paint an optimistic vision of a "global Britain" that would embrace the technological revolution and capitalise on the opportunities presented by leaving the EU. He also promised an approach that would be "balanced" amid pleas to end austerity.
But opposition leader Jeremy Corbyn, whose fortunes have been on the rise of late, was quick to criticise the government's plans, highlighting that many in the country are struggling.
"Our country is marked by growing inequality and injustice," he said. "We were promised, with lots of hype, a revolutionary budget. The reality is nothing has changed. People were looking for help from this budget and they've been let down."
On the Budget deficit, Mr Hammond struck a more optimistic view, saying it would fall below 2 per cent of GDP next year.
However, Britain still faces relatively high debt.
Public borrowing rose more than expected in October, driven by higher borrowing costs. Debt will peak at 86.5 per cent of GDP this year, Mr Hammond said. That compared with less than 40 per cent in 2007, the Office for National Statistics said on Tuesday.
Mr Hammond said he was sticking to the Conservatives' priority since coming to power in 2010 of fixing the public finances.
"We took over an economy with the highest budget deficit in our peacetime history," he told Parliament.
"Since then, thanks to the hard work of the British people, that deficit has been shrinking and next year will be below 2 per cent. But our debt is still too high," he said.
The Chancellor made no mention of defence in his speech. However, hidden in the small print of Wednesday’s Budget was a £100 million cut to the Foreign Office budget in 2019-2020, just as the UK is set to officially leave the EU.
Commenting on the cut, Tom Cargill, Executive Director of the British Foreign Policy Group, told The National: "If it was a decently funded department, then it would be less of a problem. But £100 million for the Foreign Office is a big deal – it works out as around an eight per cent cut to its budget.
“The fact that so-called ‘global Britain’ is going to cut eight per cent of its Foreign Office budget – in the precise year that we’re due to leave the EU – is not a huge sign of the recognition that we’re going to have to be spending more, not less, on our international engagements in the coming years.”
Killing of Qassem Suleimani
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
The Prison Letters of Nelson Mandela
Edited by Sahm Venter
Published by Liveright
COMPANY%20PROFILE
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
THE SPECS
Engine: 1.5-litre turbocharged four-cylinder
Transmission: Constant Variable (CVT)
Power: 141bhp
Torque: 250Nm
Price: Dh64,500
On sale: Now
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
Zayed Sustainability Prize
Straightforward ways to reduce sugar in your family's diet
- Ban fruit juice and sodas
- Eat a hearty breakfast that contains fats and wholegrains, such as peanut butter on multigrain toast or full-fat plain yoghurt with whole fruit and nuts, to avoid the need for a 10am snack
- Give young children plain yoghurt with whole fruits mashed into it
- Reduce the number of cakes, biscuits and sweets. Reserve them for a treat
- Don’t eat dessert every day
- Make your own smoothies. Always use the whole fruit to maintain the benefit of its fibre content and don’t add any sweeteners
- Always go for natural whole foods over processed, packaged foods. Ask yourself would your grandmother have eaten it?
- Read food labels if you really do feel the need to buy processed food
- Eat everything in moderation
Seven tips from Emirates NBD
1. Never respond to e-mails, calls or messages asking for account, card or internet banking details
2. Never store a card PIN (personal identification number) in your mobile or in your wallet
3. Ensure online shopping websites are secure and verified before providing card details
4. Change passwords periodically as a precautionary measure
5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties
6. Track bank notifications regarding transaction discrepancies
7. Report lost or stolen debit and credit cards immediately
Profile of Tamatem
Date started: March 2013
Founder: Hussam Hammo
Based: Amman, Jordan
Employees: 55
Funding: $6m
Funders: Wamda Capital, Modern Electronics (part of Al Falaisah Group) and North Base Media
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
The biog
Fast facts on Neil Armstrong’s personal life:
- Armstrong was born on August 5, 1930, in Wapakoneta, Ohio
- He earned his private pilot’s license when he was 16 – he could fly before he could drive
- There was tragedy in his married life: Neil and Janet Armstrong’s daughter Karen died at the age of two in 1962 after suffering a brain tumour. She was the couple’s only daughter. Their two sons, Rick and Mark, consulted on the film
- After Armstrong departed Nasa, he bought a farm in the town of Lebanon, Ohio, in 1971 – its airstrip allowed him to tap back into his love of flying
- In 1994, Janet divorced Neil after 38 years of marriage. Two years earlier, Neil met Carol Knight, who became his second wife in 1994
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
NATIONAL%20SELECTIONS
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MATCH INFO
Bayern Munich 2 Borussia Monchengladbach 1
Bayern: Zirkzee (26'), Goretzka (86')
Gladbach: Pavard (37' og)
Man of the Match: Breel Embolo (Borussia Monchengladbach)
Company%20profile%20
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