The chancellor has pledged to spend a £26.6bn Brexit war chest to boost the economy, if MPs vote to leave the European Union with a deal. Philip Hammond vowed to free up more money to cut taxes and spend on public services in a "deal dividend". However, he said these spending plans were based on a smooth Brexit.
Mr Hammond used his Spring Statement to warn that a disorderly Brexit would deal a "significant" blow to economic activity in the short term. He said the decision by MPs to reject Theresa May's Brexit deal for a second time had left a "a cloud of uncertainty hanging over our economy".
The latest figures from the Office for Budget Responsibility (OBR) forecast that the UK economy will grow at the slowest pace since the financial crisis this year. The OBR cut its 2019 growth forecast to 1.2%, the weakest growth rate since 2009.
That is a significant cut from the 1.6% expansion predicted by the government's economic watchdog last October. After that growth is expected to rebound. Mr Hammond said the economy had "defied expectations" as wages were expected to keep growing at rates of above 3% over the next five years.