Chancellor Jeremy Hunt issues warning after UK narrowly swerves recession

UK Chancellor Jeremy Hunt. photocosmos1/

UK Chancellor of the Exchequer Jeremy Hunt has warned people that ‘we are not out of the woods yet’ despite the economy narrowly avoiding recession in the second half of last year.

The Office for National Statistics (ONS) has reported that output between October and December was flat at 0%.

A negative figure would have met the technical definition of a recession because the economy contracted over the previous three months to September as the cost of living crisis took a heavy toll on consumer spending.

Economic activity has stalled largely as a result of energy-led price pressures on households and businesses – with the Bank of England even predicting in November last year that the economy was already likely in recession.

ONS director of economic statistics, Darren Morgan, said of the performance: “The economy contracted sharply in December meaning, overall, there was no growth in the economy over the last three months of 2022.

“In December public services were hit by fewer operations and GP visits, partly due to the impact of strikes, as well as notably lower school attendance.

“Meanwhile, the break in Premier League football for the World Cup and postal strikes also caused a slowdown.

“However, these falls were partially offset by a strong month for lawyers, growth in car sales and the cold snap increasing energy generation.

“Across 2022 as a whole, the economy grew 4%.”

Critics of the UK government have been urging the chancellor to use his spring budget next month to boost activity.

Some have accused him of taking a miserly approach to the public finances.

Talking to Sky News, Mr Hunt said in response to the ONS figures: “The fact the UK was the fastest growing economy in the G7 last year, as well as avoiding a recession, shows our economy is more resilient than many feared.

“However, we are not out of the woods yet, particularly when it comes to inflation.

“If we stick to our plan to halve inflation this year, we can be confident of having amongst the best prospects for growth of anywhere in Europe.”

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Written by

Simon Smedley

Reporter - Euro Weekly News