‘Low growth is not a surprise – and UK is turning corner,’ says chancellor
The chancellor has appeared to play down this morning’s GDP news, saying low growth is “not a surprise”.
“High inflation is the single biggest barrier to growth which is why halving it has been our top priority,” Jeremy Hunt said in a statement.
“While interest rates are high – so the Bank of England can bring inflation down – low growth is not a surprise.”
He said there are signs the British economy is “turning a corner”, with forecasters predicting growth will strengthen over the next few years.
“Wages are rising faster than prices, mortgage rates are down and unemployment remains low,” he said.
“Although times are still tough for many families, we must stick to the plan – cutting taxes on work and business to build a stronger economy.”
Analysis: This is looking like a shallow recession – and interest rates should start to come down, helping people’s pockets
Business analyst Gurpreet Narwan, has said the good news from receent data on the UK economy is that this recession is going to be a shallow one.
The fact the economy is shrinking will give the Bank of England reason to follow market expectations and cut interest rates, she says.
Markets currently forecast a first rate cut from 5.25% in May or June.
“That’s all going to leave people with more money in their pockets, more money to spend in the economy,” Narwan says.
“Hopefully we’ve turned a corner already, but figures like these point to two years of stagnation.”
Still, there will be questions for the chancellor about how he will “turbo charge” growth in the UK economy.
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