Hunt predicts tax cut growth as UK dodges recession

CHANCELLOR Jeremy hunt revealed tax cuts have put Britain in a ‘strong position for growth’ after official figures showed the economy bounced back late last year.

Recession fears were eased as gross domestic product (GDP) grew by 0.3 per cent in November.

This followed a 0.3 per cent fall in October as high interest rates – designed to combat inflation – took their toll.

But cuts to national insurance and a big tax break for businesses, announced in the autumn Statement, should leave more money in the nation’s pockets.

Mr hunt said: ‘While growth in November is welcome news, it will be slower as we bring inflation back to its 2 per cent target.

‘But we have seen that advanced economies with lower taxes have grown more rapidly, so our tax cuts put the UK in a strong position for growth into the future.’

Positive economic survey data from

December suggests that private sector growth in the UK outpaced that of the US and the eU at the end of last year.

While GDP shrank by 0.1 per cent in the third quarter – and a fall two quarters in a row would meet the definition of a recession – Ruth Gregory of Capital economics said the latest rebound ‘probably means the economy escaped a recession in 2023’.

She said that the picture looks set to improve this year, adding: ‘Big falls in market interest rate expectations mean the economic recovery could start a bit sooner and be a bit stronger than we currently anticipate.’

The UK economy struggled last year, with high inflation causing the base rate to hit 5.25 per cent – the highest since 2008.

But the situation was worse in europe as the weakness of Germany’s economy threatened the eurozone.