UK Treasury Chief Cautious on Budget

UK Treasury Chief Cautious on Budget

LONDON (AP) -- Britain's Treasury chief is set to deliver an upbeat message on the economy when he unveils the new budget Wednesday — but remain cautious on new spending amid uncertainty over the exit from the European Union.

Philip Hammond said he will outline his plan for the 2017-18 fiscal year laying out what the government believes will be the foundations for a "stronger, fairer, better Britain" outside the EU.

The caution over spending in the long term comes despite an improvement in the government's finances. Hammond said Britain is still 1.7 trillion pounds in debt, although the latest figures show government borrowing during the 2016-17 year will probably be about 12 billion pounds less than previously forecast.

The Organization for Economic Co-operation and Development predicted U.K. growth of 1.6 percent this year, up from the 1.2 percent predicted in November.

One of the more closely watched aspects of the budget will be what sort of measures will be offered to help small firms facing higher taxes from so-called business rates. Many small businesses are in revolt over the first rise in rates for seven years.

Most of the increases will be evident in London as much of the change is due to the revaluation of property.

More than a third of small firms expect their business rates to rise. One in five expected their annual bill to rise by more than 40 percent, a survey from the Federation of Small Businesses said.

Former chancellor George Osborne offered a tweet of support to Hammond on the big day.

"Good luck Philip with the first of what I hope will be many successful budgets," Osborne wrote. "Standing there with that red box is quite a moment. Enjoy it!"