UK banks on infrastructure spending to counter post- Brexit business uncertainty

London

UK Chancellor of the Exchequer Philip Hammond is banking on Keynesian infrastructure spending to help counter post-Brexit business uncertainty.

Robert Chote, chairman of the Office for Budget Responsibility (OBR), the independent body that provides forecasts for the government, however, admitted that Brexit negotiations make predictions exceedingly difficult. In a lengthy report, the OBR predicts that real growth, estimated at 2.1 per cent, will fall to 1.4 per cent in 2017 and inflation would rise between one per cent and 3.8 per cent in 2017. If the forecast turns out to be correct, the UK will experience stagflation next year.