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I am delighted to welcome Christine Lagarde back to the Treasury this morning (20 December 2017), to present the conclusions of the IMF鈥檚 annual Article IV assessment of the UK economy.

I had the pleasure of meeting the team during their visit and I thank them for their work.

The assessment plays an important role in providing independent scrutiny of our economy, and valuable challenge and support for our economic policymaking.

And this year鈥檚 assessment comes at an important juncture for the UK economy.

At my recent Budget I reported on an economy that continues to grow鈥�

鈥hat has delivered the lowest unemployment in 40 years鈥�

鈥nd that continues to confound those who seek to talk it down.

But there are many challenges we need to address if we are to tackle low productivity growth and go on raising living standards鈥�

鈥o deliver a new partnership with our European neighbours that supports jobs and prosperity鈥�

鈥o seize the opportunities of the rapid technological change that is going on across the world鈥�

鈥nd build a Britain that is fit for the future.

And today鈥檚 IMF report identifies some challenges, and potential solutions, for building this stronger economy.

First, the IMF urges us to go on rebuilding our fiscal buffers against future shocks.

We鈥檝e made good progress in repairing our public finances and reducing the highest budget deficit in our peacetime history by three quarters, to 2.3%.

But at 87% of GDP our debt is still too high, and so we remain committed to our fiscal rules, which are set to see debt falling next year.

And I welcome the IMF鈥檚 endorsement of our fiscal plan - which takes a balanced approach to reducing the deficit and investing to raise productivity.

Second, the IMF highlights the significant productivity challenge that the UK economy faces.

This is a common challenge across advanced economies, but the gap between UK productivity and the rest of the G7 has widened.

When I took this job, I made it the central mission of the Treasury to tackle this challenge head-on.

And since the last Article IV assessment I have established, and expanded, the National Productivity Investment Fund to deliver over 拢31 billion of investment targeted at transport, broadband, science and innovation.

In my Autumn Budget I took action to put the UK at the forefront of the technologies of the future鈥�

鈥nvesting over 拢500 million in artificial intelligence, 5G, and driverless and electric vehicles.

We鈥檝e launched radical reforms to our technical education system, to give people the skills they鈥檒l need to thrive in a modern economy.

And I was pleased to see the IMF recognise that alongside our prudent management of the public finances鈥�

鈥ublic investment is set to rise further over the medium term鈥�

鈥eaching its highest sustained level in forty years.

Third, the IMF note the regional disparities in productivity within the UK.

And it is true that if we are to build an economy that is fit for the future鈥�

鈥hen we have to get all parts of the UK firing on all cylinders鈥�

鈥nd our modern Industrial Strategy sets out our long-term plan to boost productivity throughout the UK.

The IMF recommend a greater role for local decision making, to better tailor policies to economic conditions.

We are devolving powers to elected mayors across the country鈥�

鈥nd at the Budget I announced a new 拢1.7 billion Transforming Cities Fund鈥�

鈥alf of which will go to the six areas with elected metro mayors鈥�

鈥o deliver better transport connections across our regional cities.

Finally, the IMF recognise the potential of Brexit to reshape the structure of the UK economy.

鈥nd they welcome the progress we have made in the negotiations so far.

The UK and the EU have shown what can be achieved by commitment and perseverance on both sides鈥�

鈥nd we are well on the way to delivering a Brexit that protects jobs and prosperity鈥�

鈥nd prepares Britain for the opportunities ahead.

As the negotiations with the EU enter the second phase鈥�

鈥t is imperative that we move on with discussions to secure a smooth and orderly withdrawal from the European Union.

The IMF report notes that 鈥渆arly agreement on a transition period would avoid a cliff edge exit in March 2019 and reduce the uncertainty facing firms and households鈥�.

I agree.

One of the biggest boosts we can provide to the economy鈥�

鈥f both the UK and the EU鈥�

鈥s making early progress on delivering certainty and clarity about our future relationship鈥�

鈥ith a time-limited implementation period agreed at the earliest opportunity鈥�

鈥hen we have left the EU and therefore will be outside the EU Customs Union and the Single Market鈥�

鈥ut during which we will replicate the effects of the Customs Union and the Single Market鈥�

鈥ith reciprocal access to each other鈥檚 markets鈥�

鈥nd a harmonised customs arrangement, ensuring a low friction border.

Giving businesses continuity, and certainty, to plan and invest with confidence.

I鈥檒l end my remarks there, and finish by thanking Christine Lagarde and the IMF for their continued scrutiny and support.

As ever Christine, we value your advice and look forward to studying the conclusions of your report in more detail when it is published in the Spring.

I now hand over to Christine Lagarde who will introduce the report and answer your questions.

Thank you.