UK Budget: Economy to avoid recession this year, says Hunt

• Hunt says Britain should avoid recession
• Hunt has now resisted calls for tax cuts
• Hunt wants more people to return to the workforce
• Qualification training and investment incentives expected
• The British economy lags behind the competition

LONDON (Reuters) – The UK economy is expected to avoid a recession in 2023, Finance Secretary Jeremy Hunt said on Wednesday as he began a budget speech that was expected to include measures to accelerate economic growth.

The UK economy had contracted 1.4% earlier this year, according to forecasts released by the Office for Budget Responsibility (OBR) in November.

Since then, energy costs – which skyrocketed after Russia’s invasion of Ukraine last year – have fallen and there are signs of a recovery in some economic data.

“Today the Office for Budget Responsibility is forecasting that the UK will not enter a technical recession this year due to changing international factors and the actions I have taken,” Hunt said as he presented his budget in Parliament.

The UK is the only economy in the Group of Seven not yet to regain its pre-pandemic size, having already endured a decade of near-stagnant income growth before COVID-19 slowed activity and a surge in inflation that remained above 10% lies, has reached.

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“Despite ongoing global instability, the OBR reports today that UK inflation is set to fall to 2.9% by the end of 2023 from 10.7% in the last quarter of last year,” Hunt said.

Hunt has ruled out a big spending spree or big tax cuts in his budget.

Many economists have said he likely wants to withhold some fiscal firepower to get closer to national elections expected in 2024. The opposition Labor Party is well ahead of the ruling Conservatives in opinion polls.

Rather than spend big now, Hunt is expected to use his budget speech to address some of the root causes of Britain’s economic woes, such as: B. the decline in the size of the labor market after the pandemic.

writing by William Schomberg; Graphics by Vincent Flasseur; Editing by Catherine Evans

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