Britain can bounce back, insists Hunt
CHANCELLOR Jeremy Hunt has warned of difficult times ahead after the UK economy shrank into the first stages of recession.
But he vowed the British economy would return to health despite the 0.2 per cent drop in gross domestic product (GDP) between July and September.
Mr Hunt said he will be working to make the downturn “shallower and quicker” in his autumn Budget on Thursday.
He added: “I am under no illusion there is a tough road ahead which will require extremely difficult decisions to restore confidence and economic stability.
“But to achieve long-term sustainable growth, we need to grip inflation, balance the books and get debt falling.
“While the world economy faces extreme turbulence, the fundamental resilience of the British economy is cause for optimism.”
Mr Hunt insisted the problems were largely due to Russia’s “weaponisation” of gas supplies during its
war in Ukraine. When pressed on why the UK is the only G7 economy currently shrinking, he largely blamed rising energy prices.
He added: “What we need is a plan that shows how we are going to get through this difficult period – if it is a
recession, how we make it shallower and quicker.” The Confederation of British Industry urged the Government to “learn the lessons” of the last decade. Its lead economist Alpesh Paleja urged the Chancellor to “safeguard capital spending and
investment allowances to drive private sector growth”.
He added: “A weaker growth outlook and persistently high inflation will make for some difficult decisions on economic policy.”
The Shadow Chancellor Rachel Reeves claimed: “Britain’s unique exposure to economic shocks has been down to a Conservative-led decade of weak growth, low productivity and underinvestment and widening inequality.”