All roads lead to the Autumn Statement
As any new Government beds down, every single word out of a new minister’s mouth is under the microscope for any hint of what might happen next. This why the Chancellor of the Exchequer’s speech in China this morning will get quite a bit of exposure. Phillip Hammond said has said he may use the Autumn Statement to “reset” Britain's economic policy. This wording is deliberately opaque mainly because the Government is still unsure of its overall plan. The Chancellor will be asking his civil servants to identify policy levers and economic tools to cope in the short, mid and long term of the new post EU referendum world. What the Chancellor is really telling us is that an economic and fiscal review is under way and all options are being explored. We also know that the Autumn Statement - which ironically normally takes place in December – is the next key political milestone. It will be the first chance to see tangible policies and evidence of what this Government plans to do with the economy and business.
This is not the first hint that the Government has given and it certainly won’t be the last in the run up to the Autumn Statement. Theresa May has already said she will scrap the fiscal targets of meeting a surplus at the end of the year, meanwhile both May and Hammond have suggested a willingness to borrow to invest in infrastructure. This is certainly a step change in narrative from George Osborne’s tenure. However, don’t expect a fire sale on austerity. The Chancellor will not want to trade the Conservatives’ economic credibility but evidence of economic downturn like the PMI survey means they have their work cut out. Any credible advice on how to navigate the new and unknown chapter in the UK economy may result in an invite to Whitehall.