Chancellor warns Brexit uncertainty leaves UK facing 'eye-watering' debt
Philip Hammond admits there is no clarity on future trading arrangements as he says forecasts show "inflation is back".
Sunday 20 November 2016 18:18, UK
The Chancellor has warned that an unprecedented level of uncertainty surrounding Brexit has led to forecasts which predict slower growth for the UK and an "eye-wateringly" large debt.
Philip Hammond admitted that the Government will not have any clarity on the UK's future trading arrangements after it triggers Article 50 to begin the Brexit process.
Speaking ahead of his Autumn Statement on Wednesday, he cautioned those expecting giveaways that the economy is facing a "sharp challenge" but said the Government's priority would be helping Just About Managing families (JAMs).
Campaigners have called on the Chancellor to reverse cuts to universal credit (UC) made by George Osborne, which critics have said will leave working families up to £1,300 worse off by 2020.
Mr Hammond told the BBC: "Many of those forecasts are pointing to a slowing of economic growth next year and a sharp challenge for the public finances.
"We have to maintain our credibility - we have eye-wateringly large debt, we still have a significant deficit in this country and we have to prepare the economy for the period that lies ahead.
"I want to make sure that the economy is watertight, that we have enough headroom to deal with any unexpected challenges over the next couple of years and most importantly, that we're ready to seize the opportunities of leaving the European Union."
Speaking on ITV on Sunday, Mr Hammond said: "We have to wait and see what inflation figures look like when we get the OBR's (Office of Budget Responsibility) report on Wednesday, but I think looking at the consensus of forecasts, it's clear that inflation is back."
Britain is reportedly facing a £100bn black hole in public finances over Britain's exit from the EU.
Shadow chancellor John McDonnell called for the reversal of cuts to UC and employment support allowance.
He told the BBC that Labour would support an increase in the 40p tax threshold from £45,000 next year to £50,000.
He said: "What we need is a long term strategy. This Autumn Statement, we're going back to giveaways and gimmicks again."
Mr Hammond has already revealed the Autumn Statement will contain £1.3bn of improvements to UK roads.
That includes £1.1bn to reduce congestion and upgrade local roads and transport networks, as well as £220m to tackle "pinch points" on motorways and major A roads in England.
Shadow work and pensions secretary Debbie Abrahams told Sky News' Murnaghan show there were alternatives to cutbacks that harm people on low incomes.
She said: "Inequality in this country is getting worse. We've seen boardroom pay increase by 50% where the average income of a worker has only increased by 2% in real terms.
"This is not the Britain that we want. It's about making sure that businesses bear the brunt of the cuts, not people on low income, low pay and the disabled."