Due to shifting global developments and government support measures, the UK economy is expected to contract this year but escape a technical recession, according to Chancellor Jeremy Hunt’s budget speech.
Hunt stated as he delivered the spring budget statement to the parliament that the Office for Budget Responsibility, also known as the OBR, predicted the economy will not experience any recession this year with a decline of just 0.2 percent.
Two straight quarters of declining output constitute a technical recession.
The government had predicted a 1.4 percent decline in GDP this year and the economy going into a recession last year in its fall statement from November.
The chancellor continued, “And after this year, the UK economy will expand in every single year of the forecast period: by 1.8 percent in 2024, 2.5 percent in 2025, 2.1 percent in 2026, and 1.9 percent in 2027.
In comparison to the Autumn forecast, 170,000 fewer people are expected to be unemployed, resulting in a predicted increase in the unemployment rate of less than one percentage point to 4.4 percent.
Hunt reiterated that halving inflation is one of the Rishi Sunak administration’s top economic objectives.
By the end of 2023, the OBR predicted that inflation would have decreased from 10.7 percent in the final quarter of 2022 to 2.9 percent.
The chancellor attributed the recent wave of national strikes to high inflation as their primary cause.
We’ll keep working hard to resolve these disagreements, but only in a manner that doesn’t promote inflation, Hunt said.
Source: RTT NEWS
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