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UK could boost public spending if it wins Brexit deal - Chancellor

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UK could boost public spending if it wins Brexit deal - Chancellor

UK could boost public spending if it wins Brexit deal - Chancellor
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LONDON (Reuters) - Britain would be able to choose to increase public spending and eat into its fiscal "headroom" if the country negotiates a deal to leave the European Union, Chancellor Philip Hammond said on Monday.

"In the event of a successful negotiated exit deal with the European Union I would expect confidence to return to the UK economy very quickly," he told a committee of lawmakers.

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"I would expect us to no longer need to hold the kind of level of headroom against meeting our fiscal rule in 2021 and indeed, it's not just a single year - we've got a profile of headroom against that metric across the whole five year period. We could, if we chose to, allow borrowing to rise a little and eat into that headroom and that would be a choice."

Hammond also said that faster growth, rather than running a budget surplus, would be an easier way to reduce Britain's debt burden as a share of economic output.

(Reporting by David Milliken, writing by Elizabeth Piper; editing by Alistair Smout)

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