The speculation in advance of this statement was particularly intense. This was the first major event for Philip Hammond, the new Chancellor, and the first major economic and financial pronouncement since the Brexit vote. More often than not in contemplating such statements I see boring as best. Far too often they include change for change’s sake. This time around, given the widely expected Brexit-related economic slowdown, changes in both the fiscal policy stance and economic policy more broadly were essential.

The first point to be covered was the economic outlook, alongside what this might mean for the public finances and how far the Chancellor was prepared to loosen policy as compared with the hair-shirted approach of his predecessor. Just how far would the rabid pro-Brexiteers allow him to go in admitting that the economic outlook was worse because of the Brexit vote, and hence a looser policy was necessary?

We did not have to wait long for news on this front. The new Office for Budget Responsibility (OBR) forecast, which the Chancellor is required to adopt, is for GDP growth next year at 1.4% (down from 2.2% in the March Budget) and then 1.7% in 2018 before returning to around trend at c.2%. The slowdown is due initially to lower investment and hence weaker productivity growth; and then a sharp deceleration in consumption given real income growth stalling during the latter part of next year when funds available for consumption will be less than previously anticipated.

Let me be clear that this anticipated slowdown in both investment and consumption follows from the decision to exit the EU. Investment has slowed and will continue to be subdued because of the range of uncertainties faced by domestic businesses and potential inward investors. Then in 2017 real income growth is forecast to stall, because inflation picks up significantly – as a direct result of sterling’s depreciation following the Brexit vote. To quote the OBR report: - …. we have not attempted to predict the precise end result of the negotiations [how could they!!]. Instead we have made a judgement that over the time horizon of our forecast any likely Brexit outcome would lead to lower trade flows, lower investment and lower net inward migration than we would otherwise have seen, and hence lower potential output’.

The OBR forecast is broadly in line with others coming from respected bodies before this Statement. If anything their forecast for inflation may be a touch conservative. But as they emphasise this forecast is even more precarious than normal because we do not know what Brexit will mean.

Mr Hammond was quick to accept that he was not in any position to achieve his inherited targets for the public finances. There would be no return to surplus in 2019/20, rather ‘a return to balance as soon as practicable’. Under his new rules this is not expected until early in the next Parliament. Net debt as a % of GDP will keep on rising to a peak of over 90% in 2017/18. This would be the highest for some 35 years.

Mr Prudence has clearly left the building and been replaced by Mr Pragmatic. Indeed Mr Hammond has allowed himself some further flexibility over his fiscal targets in case economic performance and hence the position in the public finances is even worse than at present expected. This has to be the right approach. Just like the OBR he does not know what Brexit will mean and the adverse impact could be even more substantial than the latest forecast suggests. If so the response should be to allow a further small increase in deficit and debt, rather than risking recession.

Next up came the critical issue of how to improve economic performance. Mrs May has pronounced that there is to be an industrial strategy. As I have frequently emphasised in Herald articles there is a desperate need (in the UK and in Scotland) to improve productivity and hence competitiveness and efficiency. Improving productivity should be seen as the right route to enhanced growth in real wages.

Again Mr Hammond made the right noises. He allocated significant new funds (£23billion over 5 years) to encourage R&D and innovation – presumably with more detail to follow. Further there were major new allocations for transport, digital roll out and direct support to business – including more venture capital funds to support start-ups in their growth path. In addition he announced major plans for new affordable housing, and over £2billion for enhanced infrastructure to encourage such housing in areas where lack of infrastructure was constraining activity. Looking beyond the short term he committed Government to spending between 1% and 1.2% per annum on infrastructure each year from 2020.

The good news for Scotland is that we should benefit, via the Barnet formula, by some £800 million per year extra for infrastructure expenditure. However, across the UK, including Scotland, we need to learn more about how these extra resources can best be deployed to generate more innovation, higher investment and stronger productivity growth. HM Treasury is establishing a review to better identify the barriers to the ‘patient’ capital needed to deliver innovation. The Scottish Government should participate. Scotland has a gap in financing between the angel investor stage and that when more standard sources of funding become available. We do very well in developing innovative ideas but less well in delivering through business.

Having initially claimed a lack of expertise in producing rabbits out of his Chancellor’s top hat, Mr Hammond concluded with a real – and most welcome – surprise. This was his last Autumn Statement, not because his resignation is in the post but because he is re-structuring the UK Budget process. After next spring’s Budget we will move to one major pronouncement each year – a Budget in the autumn. There will be a spring event, but simply to respond to the OBR’s forecast update.

Going forward Chancellors should only have one opportunity per year to fiddle around with tax rates, expenditure allocations, et al. Excellent; the less incentive to fiddle unnecessarily the better.

Jeremy Peat is visiting professor at the University of Strathclyde's International Public Policy Institute