Chancellor of the Exchequer Jeremy Hunt said the UK economy will avoid a recession this year as the outlook improves, giving the Treasury a potential boost.
“The UK economy is on the right track,” Hunt said in a speech to Parliament in London on Wednesday. “The UK will not now enter a technical recession this year,” he said, adding that the outlook is to “halve inflation, reduce debt and get the economy growing.”
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He said the Office for Budget Responsibility, the fiscal spending watchdog, expects inflation to fall from 10.7% in the final quarter of 2022 to 2.9% by the end of this year.
The projection was the first parts of the Treasury’s annual budget statement, which includes Prime Minister Rishi Sunak’s tax and spending priorities in the leadup to the next general election. Hunt is repairing damage done to the public finances that sparked a panic last year during Liz Truss’s brief term as prime minister. The Conservative government must call a vote by early 2025.
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Hunt also confirmed that the government’s Energy Price Guarantee will remain at £2,500 for the next three months, keeping a lid on customer electricity and natural gas bills before prices are expected to fall later this year.
