British economic growth could approach US levels, Jeremy Hunt predicts ahead of inflation figures
- The British economy shrank by 0.3 percent in the last quarter of 2023
- But Chancellor Jeremy Hunt remains optimistic the economy could grow to near US levels
British economic growth could approach US levels, the Chancellor predicted ahead of the publication of the latest inflation figures.
In a positive assessment of the economy, Jeremy Hunt said it was ‘absolutely possible’ that Britain could grow faster than Europe.
US GDP grew by 3.2 percent in the final quarter of 2023, figures show, while the British economy shrank by 0.3 percent. Economic growth in the eurozone was flat over the same period.
The U.S. economy defied fears of a recession, helped by a rate hike to curb inflation and a tight labor market that has kept wages high.
Appearing before colleagues on the Economic Affairs Committee yesterday, Mr Hunt spoke about efforts to increase productivity in the public and private sectors.
Jeremy Hunt speaks to Rishi Sunak after presenting the annual budget statement in the House of Commons on March 6
Rishi Sunak and Jeremy Hunt take a break during a visit to a construction warehouse in London on March 6
He said: ‘If you look at our policy to increase private sector investment with the full tax breaks that we have announced, if you look at our nurturing of the technology sector, which I think is a great opportunity for Britain will be. moving forward.
“It is absolutely possible to healthily move our economic growth closer to U.S. growth levels compared to the growth levels of continental Europe.”
The Chancellor also said he does not believe the tax rate increases should be “irreversible.”
His comments come as inflation is expected to fall to a new low of almost two-and-a-half years today when official data for February is released.
Most economists expect Office for National Statistics (ONS) figures to show inflation fell to 3.5 per cent in February – down from 4 per cent in January and the lowest since September 2021, when this amounted to 3.1 percent.
It comes ahead of the Bank of England’s latest interest rate decision tomorrow, with policymakers expected to keep interest rates at 5.25 percent.
But another sharp decline in the consumer price index could strengthen expectations that the Bank is closer to a rate cut later this year.
In today’s Daily Mail – four years after the furlough scheme was introduced – the Prime Minister says the economy is ‘showing strong signs of recovery’.
Rishi Sunak says the plan has ‘successfully saved thousands of businesses from collapse and millions of jobs have been lost’, and that ‘we have now really turned a corner’.
‘The furlough protected jobs and, thanks to our success in bringing stability to the economy, controlling inflation and reining in spending, we are well on our way to sustainably lower taxes.
‘We started that journey in the autumn with a 2p National Insurance discount worth £450 for the average worker on £35,400 a year. And the Chancellor has cut taxes again for this month, which now means 27 million workers will get an average tax cut of around £900 a year.”