Hammond sets target for cyclically-adjusted budget deficit

Britain's Chancellor of the Exchequer Philip Hammond leaves 11 Downing Street on his way to present his Autumn Statement in the House of Commons, in London November 23, 2016. REUTERS/Toby Melville

LONDON (Reuters) - Chancellor Philip Hammond said on Wednesday the government would aim to cut the country’s budget deficit, adjusted for swings in the economy, to below 2 percent of gross domestic product by the end of the current parliament in 2020.

Hammond confirmed that the overall budget would not be balanced until during the term of the next parliament.

Public sector net debt should also be falling as a percentage of economic output by the end of the current parliament while welfare spending must also remain inside a cap set by the government, Hammond said as he set the government’s new fiscal rules.

(This story amends headline and 1st paragraph to show new target is for cyclically adjusted budget deficit, not excluding investment)

Writing by Andy Bruce; Editing by William Schomberg