Steady hand on the tiller as UK rides out the storm

JEREMY Hunt announced bold plans to expand childcare and get more people into work in an upbeat Budget. But welcome as these measures are, the most important message in his statement to MPs was a simple one.

The plan is working. Mr Hunt’s biggest challenge since taking the reins at the Treasury has been to steady the ship, ensure financial markets have confidence in the UK’s ability to balance the books and strike the right balance between controlling inflation and growing the economy. He’s succeeding admirably.

Mr Hunt and Prime Minister Rishi Sunak have proved the naysayers wrong.We were told the UK would enter a recession, but it’s not happening.

While the economy is expected to shrink slightly this year, it will then grow significantly.

Inflation is already down from the highs of last year, and is expected to fall to very low levels by the end of this one before eventually settling at around two per cent.

Of course, this doesn’t mean prices in our shops will go back down but it does mean the period of rapid increases is ending.

Global energy prices, by contrast, are actually falling. This is outside the Government’s control, but it’s certainly good news.

And Mr Hunt has extended the Energy Price Guarantee, to help households while we wait for domestic energy bills to drop.

Even the increase in mortgage rates is less severe than previously predicted.

It’s a Budget that entrenches stability while looking to the future. Crucially, helping parents and others into work, and tax breaks encouraging businesses to invest, will promote the economic growth that is vital to this country’s prosperity.

While the focus on stability is absolutely correct, it’s a task that leaves Mr Hunt with limited room for manoeuvre.

The Chancellor currently has little money to play with and his real goal must be to ensure the public finances are in a state that allows him to take even bolder decisions in the future.

In particular, we hope that he will eventually be in a position to cut the UK’s tax burden, about to reach the highest it has been since the Second World War – although it’s worth noting that UK taxation as a proportion of GDP is still forecast to remain lower than that of most other advanced economies.

Mr Hunt will be hoping he can be even more upbeat this time next year, when he is likely to be delivering his final Budget statement before a general election.

For now, the Chancellor, and the nation, can be confident that he is on the right track.