British finance minister Jeremy Hunt said the United Kingdom is not forecast to enter into a recession this year. Hunt also said that the inflation rate is predicted to fall to 2.9 percent by the end of the year.
Hunt presented his budget to parliament on Wednesday, saying that the country is no longer predicted to enter into a recession this year. Hunt also said that the double-digit inflation in the country would drop to single digits by the end of the year even as “global instability” remains.
“Today the Office for Budget Responsibility forecast that because of changing international factors and the measures I take, the UK will not now enter a technical recession this year,” said Hunt. “Despite continuing global instability, the OBR report today that inflation in the UK will fall from 10.7 percent in the final quarter of the year to 2.9 percent by the end of 2023.”
Hunt also announced reforms to childcare and pension to bring people back to work as well as corporate tax breaks to bolster business investments. Such reforms include free childcare to children under two years old and ending the penalties for people breaking thresholds on pension contributions to encourage older people to stay at work and welfare reforms to encourage disabled people to work.
Hunt also extended energy subsidies to households that were the most affected by increasing energy bills and froze the tax on vehicle fuel. However, even with the aid for households in need, living standards in the country will still be on track for a record fall in the two years until March 2024.
“The International Monetary Fund says our approach means the UK economy is on the right track,” said Hunt, adding that there would be an additional £11 billion in defense spending that has been stretched out due to the war in Ukraine.
Opposition Labour Party leader Keir Starmer accused Hunt of “dressing up stagnation as stability” and said that the country “is on a path of managed decline.”
Hunt, as well as Prime Minister Rishi Sunak, have dismissed calls from some lawmakers in their governing Conservative Party for significant tax cuts to ease the heavy tax burden on the UK’s economy.