Budget 2017 reactions: How City investors, economists and other experts have responded

'Thank god for the tax freeze on spirits, beer and wine because, given these numbers, we’re going to need it,' says one economist

Mr Hammond slashed growth forecasts and warned that borrowing will increase sharply (Getty)

Chancellor Philip Hammond delivered a gloomy Autumn Budget on Wednesday, slashing growth forecasts and warning that borrowing will increase sharply.

Here’s a look at how investors, economists and other experts from the City and beyond have responded.

John Hawksworth, chief economist at PwC

"The Chancellor had to walk a narrow tightrope between maintaining fiscal prudence and responding to widespread pressure to ease austerity. He had to do this while facing significant cross-winds from downgrades in the OBR's economic growth forecasts and consequent increases in projected public borrowing in the medium term that were slightly larger than we had expected.

“At first sight, the Chancellor just about managed to keep his balance, although the details will need further scrutiny over the coming days.”

Neil Birrell, chief investment officer, Premier Asset Management

“The Chancellor has delivered a fairly uninspiring Budget, although he didn’t have much room for manoeuvre given the state of the economy and the Brexit negotiations. The downgrades to economic growth and productivity are significant and are symptomatic of the fragility of the economy and there is little promise of improvement, although the forecast reduction in debt is positive. Investment in the economy is obviously good news, but doesn’t provide any quick fix. The focus on the technological revolution and education are likely to be of particular long term benefit. Furthermore, the plans for the housing market are supportive.

“The impact on markets is probably limited, but the downgrades to growth and comments on inflation are mildly negative for sterling and are likely to temper expectations for further interest rate rises, so somewhat positive for equities and bonds. The cost of Brexit is rising with the divorce bill seemingly going up and the increased amount being put to one side in the budget testament to that. The UK economic outlook remains a concern.”

Neil Williams, chief economist at Hermes Investment Management

“With splits in the party, Brexit looming, and disappointing UK productivity growth, two things from today’s Budget were inevitable: that it was going to be more political than economic; and that lower growth assumptions would involve higher borrowing ratios further out. With Brexit yet to be financed, Mr Hammond was today never going to show other EU governments watching unbridled fiscal largesse.

“There were admittedly some ‘rabbits out of hats’ for the lower-income end and housing supply, including stamp duty, measures to help cities, and indexation of business rates. However, these together are not enough in the OBR’s forecast to lift GDP growth much beyond ‘potential’.

“So, let’s not get carried away. Depending on Brexit and future growth, the fiscal screw may yet have to be re-tightened later if he is to hit the OBR’s fiscal targets.”

Jeremy Cook, chief economist at WorldFirst

“Focus will naturally fall on the Stamp Duty rabbit but the real headline should be the swingeing cuts to the UK’s growth forecasts. These represent the weakest expectations on growth over a forecast period in the modern era and probably the largest downgrades since the advent of the Global Financial Crisis. In light of growth upgrades in major, key, trading partner countries, these figures are even more disappointing. Thank god for the tax freeze on spirits, beer and wine because, given these numbers, we’re going to need it.”

“This was always going to be a political budget – hence the lack of a section on pensions or the elderly for the first time I can recall. It is the younger voter who got the juiciest bone from Chancellor Hammond.”

“We are of the belief that Brexit and the performance of the UK economy will live and die via investment and trade. Today’s announcements have done little to assuage our fears on the first while we wait on progress on the second.”

Shakila Hashmi, head of money at comparethemarket.com

“For a Government that has been accused of losing touch with young people, the Chancellor has succeeded in delivering a Budget for the millennial generation. Stamp duty is a prohibitive tax that only serves to widen the gap between generations who are able to afford a home and those who cannot get a foot on the property ladder, as house prices continue to edge higher each year.

“Abolishing stamp duty for many first time buyers will go some way to helping the affordability crisis facing younger people. A commitment to more affordable travel for 26-30 year olds will also bring welcome financial relief to those already spending thousands of pounds a year commuting to and from jobs based a long way from their homes. Significant house building, combined with meaningful reform to stamp duty, are major steps to bridging the home ownership gap between old and young in this country.”

Kathleen Brooks, research director at City Index

“The growth forecasts were much lower than expected, with 2017 growth reduced to 1.5 per cent from 2 per cent, 1.3 per cent versus 1.7 per cent for next year and 1.3 per cent versus 1.9 per cent for 2019. Although GDP was expected to be revised lower, forecasts were not expected to be slashed to this extent.

“They are significantly below the [Bank of England] growth forecasts, which has led to the market to view them with suspicion, perhaps the bar is being set too low so that the Chancellor can exceed them easily in the coming years? The market will not be fooled.”