IT’S SUNAK’S RECESSION
PM’s vow to grow economy lies in tatters as GDP slumps
Rishi Sunak’s economic plans are “in tatters” after official figures showed the UK entered a recession, Labour said.
Shadow chancellor Rachel Reeves said the PM can “no longer credibly claim his plan is working”.
The announcement yesterday was a hammer blow to Sunak, who made growing the economy one of his five key pledges, and comes just three weeks before Chancellor Jeremy Hunt delivers his Budget.
Reeves said: “Rishi Sunak’s promise to grow the economy is now in tatters. The Prime Minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off.
“This is Rishi Sunak’s recession and the news will be deeply worrying for families and business across Britain. It is time for a change. We need an election now to give the British people the chance to vote for a changed Labour Party that has a longterm plan for more jobs, more investment and cheaper bills.”
Meanwhile, Lib Dem leader Sir Ed Davey said: “Rishi’s recession has savaged the British economy by decimating growth and leaving families to cope with spiralling prices. Years of Conservative chaos and a revolving door of Conservative chancellors has culminated in economic turmoil.
“It’s hardworking Brits forced to pick up the tab for this mess, through high food prices, tax hikes and skyrocketing mortgage bills.
“This year the country will have the chance to kick out this incompetent and out-of-touch government once and for all.”
A recession is defined as two consecutive quarters where gross domestic product (GDP) declines. GDP is a measure of the size and health of the economy.
Yesterday’s update from the Office for National Statistics revealed GDP shrank by 0.3 per cent between October and December 2023. This followed a decline of 0.1 per cent between July and September 2023.
Hunt said low economic growth was “not a surprise” but said the UK must stick to the Government’s plan.
He said: “High inflation is the single biggest barrier to growth which is why halving it has been our top priority. While interest rates are high – so the Bank of England can bring inflation down – low growth is not a surprise.
“But there are signs the British economy is turning a corner – forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low.
“Although times are still tough for many families, we must stick to the plan – cutting taxes on work and business to build a stronger economy.”
The announcement has been branded a “wake-up call” for the Government.
Pranesh Narayanan, of the Institute for Public Policy Research, said: “Chronic underinvestment in hospitals, schools, net zero and infrastructure has created a crumbling public realm and a broken economy.
He added: “This should be a wake-up call that spurs the Government to prioritise public investment rather than irresponsible tax cuts. Let’s fix our problems now rather than storing them up for later.”