Chancellor insists Brexit deal will help economy and reveals Londonderry talks 'progressing'

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The money should help Britain offset an economic slowdown caused by uncertainty over how Brexit will be resolved. Previously the OBR had predicted growth of 1.4% for 2021 and 1.5% in 2022.

In Hammond's speech yesterday, the Treasury's official view on a "disorderly Brexit" were also made clear, during which Hammond said it had the potential to become "a significant blow" to the United Kingdom economy.

The chancellor said he intends to launch a full three-year Spending Review "before the summer recess" in order "to be concluded alongside an Autumn Budget".

It echoed last month's sentiments from the Bank of England, which warned Brexit uncertainty is set to see growth slump to its lowest level for 10 years in 2019.

"I hoped we would do that last night, but I am confident that we, as a House, will do it over the coming weeks".

"Leaving with "no deal" would mean significant disruption in the short and medium term, and a smaller, less prosperous economy in the long term than if we leave with a deal - higher unemployment, lower wages, higher prices in the shops".

Mr Johnson said there was a consensus among economists that the United Kingdom economy would have been about 2% bigger had the Brexit referendum not occurred.

However cumulative growth over the next five years is now expected to be slightly higher than it was at the Budget forecast.

Britain will have a £26.6-billion (RM143.92-billion) war chest to battle the potential damage of its exit from the European Union, a government oversight body said.

Mr Hammond added that the United Kingdom economy was expected to grow by 1.4 per cent in 2020, unchanged from the government's October forecast.

While Brexit matters, it is not the only thing that matters, he said. "There are still an bad lot of decisions that will have to be taken by the government in the United Kingdom and in other countries".

He repeated his forecast that there would be a Brexit deal "dividend" as companies regained confidence and he could choose between increased spending on public services, capital investment and keeping taxes low while also bringing down debt.

Borrowing will fall from £29.3 billion (RM157.85 billion) in 2019-20, compared to a forecast of £31.8 billion in October.

The Chancellor told MPs that the OBR also expects 600,000 additional jobs to be generated by 2023, reaching a total of 33.2 million people in employment.

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