UK Chancellor Philip Hammond has ditched his predecessor George Osborne's commitment to return government finances to a surplus by 2020.
In the government's first major economic announcement since the Brexit vote, Hammond also unveiled lower economic growth forecasts in his first Autumn Statement as Chancellor on Wednesday (23 November).
Here are the key points of Hammond's speech:
- Britain's economy is forecast to grow 2.1% for 2016 and 1.4% in 2017.
- The National Minimum Wage will raise to £7.50 an hour from April 2017.
- The government has abandoned plans to run a budget surplus by 2020 and will instead borrow £59bn next year, £46.5bn in 2018/19 and £21.9bn in 2020.
- Agency letting fees will be scrapped.
- The Autumn Statement will be abolished, while the budget will be moved to the autumn from March.
That concludes our live coverage of the Autumn Statement for today. Thanks very much for following and remember you can more in-depth analysis of today's events by visiting our dedicated Autumn Statement page.
In the lead-up to the Autumn Statement, much was made of the impact Hammond's speech would have on the so-called JAMs, families that are "Just About Managing." However, Liberal Democrats leader Tim Farron has claimed it is the government that is just about managing.
"The official figures have revealed a £220bn Brexit black hole - hundreds of billions taken out our economy when we need it most," he said.
"Given how bad the outlook is, it's no wonder the Chancellor doesn't want to have to do another Autumn Statement."
The £220bn figure is the projected increase in national debt by the end of parliament, which would bring the total to £1.9trn.
"We are seeing a drop in tax receipts of £8.2bn over the next two years alone," Farron added.
"That's enough to fund over 330,000 nurses. Sadly now patients will pay the price. There is also nothing for public sector workers, our doctors, teachers and armed forces, who deserve a proper pay rise."
My colleague Roger Baird has rounded-up what the Autumn Statement will mean for British businesses and the long-term implications of Hammond's fiscal plan.
"Chancellor Philip Hammond moved to calm the nerves of business leaders by insisting that the UK would remain a low-tax economy despite the country's Brexit vote.
He confirmed in the Autumn Statement that corporation tax will fall to 17% from 20% by 2020 as planned, which the government said would be the lowest overall rate of corporate tax among the G20 nations."
Carolyn Fairbairn, the director general of the Confederation of British Industry said the chancellor has prioritised a pragmatic down payment on future productivity growth.
"His emphasis on R&D, housing and local infrastructure will help businesses in all corners of the UK to invest with greater confidence for the long-term, during turbulent times," she said, adding the plans will be warmly welcomed.
"These measures must now be translated into action. That means tarmac, tracks and telecoms being laid, and clear, deliverable timetables for major projects – only then will they act as a catalyst for investment, jobs and growth.
"Reducing the frequency of fiscal events along with the commitment to stick with the tax roadmap will provide stability for businesses. Importantly, the new fiscal rules provide the Government with welcome flexibility, while remaining prudent, in uncertain times.
"The Government is right to accept the independent Low Pay Commission recommendations, as firms want to see affordable rises in the minimum wage that protects the low paid and avoids damaging job prospects.
"The Chancellor should keep a watching brief on the challenges created by higher inflation and uncertainty weighing on near-term business investment."
Here is some more political reaction on the Autumn Statement by our colleague Ian Silvera.
"Philip Hammond set a no-frills tone as he made a swift exit from Number 11 and jumped into his ministerial car before he unveiled the Autumn Statement on Wednesday. It was a sign of things to come as the Chancellor abandoned the pomp and circumstance of photo-friendly George Osborne, who sat by Ken Clarke as Hammond took to the dispatch box."
This graphic from the Office for Budget Responsibility offers a quite handy recap of what has unfolded today.
AXA UK's chief executive, Amanda Blanc has criticised the government's proposals to increase insurance premium tax from 10% to 12%.
"This hike – the third in the space of 18 months – represents an unwarranted attack on millions of people simply looking to protect themselves, their families and their key assets.
"This is a classic case of the Government giving with one hand, in the form of whiplash reforms, and taking with another. The country is already underinsured and ever rising insurance taxation could have the unintended consequence of making this situation even worse."
Tom Stevenson, investment director for personal investing at Fidelity International, says that while we are not looking at a 1930s style building boom, there were significant sums committed in the Autumn Statement to support the construction of new homes and improve infrastructure.
"Housebuilders could gain, although the reaction from shares in the sector has been mixed, if not slightly negative," he adds.
"Things look better for companies supporting and exploiting construction in various ways – tool-makers, engineers, repair providers.
"Infrastructure investment companies could win if they can access the projects receiving a state boost while commitments to expanding internet coverage should help companies providing internet connections and network maintenance.
"Losers included estate agencies, who were told the admin fees they charge tenants are about to be regulated, while insurers suffered an increase in Insurance Premium Tax that makes their products more expensive. Employers of large, low-paid workforces will have to pay staff more than planned following the rise in the National Living Wage."
The Office for Budget Responsibility has also estimated the impact of borrowing directly related to Brexit, as explained by Resolution Foundation head of research Duncan Weldon.
Those thinking the government's forecast for borrowing were bad better brace themselves for the worst, as the latest economic and fiscal outlook from the Office for Budget Responsibility (OBR) makes for some grim reading.
The figures show Britain's national debt is expected to hit £1.945trn by 2019-20, the end of the current parliament, and continue climbing to £1.952 by 2021-22.
"We expect further upward revisions to the borrowing forecasts in future as growth falls short of the OBR's expectations and as the Government backslides on the big consolidation planned for 2019/20, just before the next election," said Samuel Tombs, chief economist at Pantheon Macroeconomics.
Tina Hallett, government and public sector leader at PwC, said the Autumn Statement is a first step in the right direction, although she warned that there was still a long way to go to achieve Theresa May's aspirations of a "country that works for everyone".
"Though the Prime Minister and Chancellor have changed, the problems the country is facing have not," she said.
"For public finances to be repaired, including a higher stream of tax revenues, we also need real incomes to grow which ultimately requires higher productivity. But income growth is meaningless if the cost of living also grows and the people 'just about managing' or not managing at all feel no difference day-to-day.
"Today's announcement does recognise the need for people to feel investment, for example, a cash injection into small infrastructure schemes, like road repairs, quickly make a difference to the daily commute.
"While this type of investment produces a 'quick win' for the government, they still need to address the underlying issues which keep many families living in poverty, struggling to manage. The Poverty Premium - where the poorer you are, the more likely you are to pay higher costs for goods and services - is an example of a fundamental problem which we need to address to help prevent a deepening of the social mobility challenge in this country."
Here is the Office for Budget Responsibility's reaction to the Autumn Statement.
"The Chancellor has relaxed his fiscal targets to make space for a modest infrastructure spending giveaway over the next five years," it says.
"A weaker outlook for the economy and tax revenues – and these new spending commitments – mean that the budget is no longer expected to return to surplus in this Parliament, with a £21bn deficit remaining in 2020-21."
"Public sector net borrowing is now expected to fall more slowly than we forecast in March, primarily reflecting weak tax receipts so far this year and a more subdued outlook for economic growth as the UK negotiates a new relationship with the European Union.
Hammond has concluded his speech by reiterating that Britain, which he described as a great nation, is a country open for business.
Quite surprisingly, Hammond says this is his first and his last autumn statement, as he is abolishing it and no other major economy makes hundreds of changes every year.
Next year's spring budget will be the final spring budget, with an autumn budget to follow thereafter ahead of the start of a new financial year.
Following that, there will be a spring statement to respond to the forecast from the Office for Budget Responsibility but there will be no major fiscal event.
As widely forecast, Hammond says the government will ban fees for tenants as letting agencies have spiralled out of control. The government will also ban pension cold-calling and cancel the proposed fuel duty rise for the seventh successive year, which will save the average driver £130 a year.
UK chancellor Philip Hammond has ditched predecessor George Osborne's commitment to return government finances to a surplus by 2020.
In his first major economic announcement since the Brexit vote, Hammond also unveiled lower economic growth forecasts in his first Autumn Statement as Chancellor on Wednesday.
Personal allowance will rise to £11,500 in April 2017, Hammond says, adding 28m people have had their income tax cut over the last six years and 4m people have been taken out of income tax altogether over the same period.
The chancellor adds the government remains committed to taking the allowance up to £12,500 by the end of this parliament, while the 40p threshold will rise to £50,000 over the same period.
Hammond claims the current government has done more than any other to tackle tax avoidance and evasion, bringing Britain's tax gap among the lowest worldwide. A new penalty for people who use a tax avoidance scheme will be introduced, he says, adding the new tax avoidance measures will save £2bn over the forecast period.
Insurance premium tax will rise from 10% to 12%, but the government will change the rules on whiplash compensation, which will save drivers £40 a year on average. Hammond adds from April next years, employers and employees who use benefits in kind schemes will pay the same tax as everyone else. However, there will be exceptions, including for childcare and cycling.
Hammond confirms plans to cut corporation tax to 17% as he wants Britain to remain the number one destination for business. Meanwhile, rural rate relief will be increase to 100%, boosting businesses in rural areas.
Public spending has a proportion of GDP has fallen to 40% in the six years since the Coalition government came to power, compared to 45% under the previous Labour government, Hammond says.
He adds the Conservative party has showed controlling spending and having world class services are not mutually exclusive and that departmental spending limits will remain in place, before rising along inflation in 2021-22.
Hammond admits investment has been focused on London for far too long and points out no other major economy is burdened by such a gap between the productivity of its capital and its other cities.
As such, the government will work on address the disparity between London and the rest of the country, beginning with an evaluation that will allow the east Midlands rail hub to go ahead.
The chancellor adds the government remains committed to devolution and new city deal for Stirling is being negotiated.
As widely expected, Hammond stresses the need for the UK to be a world-leader in 5G technology and the government will commit over £1bn to be invested in digital infrastructure.
From April next year, business rates relief will be implemented on investment in new fibre technologies, while spending on economic infrastructure will rise to between 1% and 1.2% of GDP from 2020, compared to the current 0.8%.