UK will not enter a recession this year, Finance Minister Jeremy Hunt says in budget speech

3 yıl önce

British Finance Minister Jeremy Hunt that the U.K. economy would not enter a technical recession in 2023, while announcing the government's spring Budget.

Dan Kitwood | Getty Images News | Getty Images

LONDON â British Finance Minister Jeremy Hunt said Wednesday that the U.K. economy would not enter a technical recession in 2023, as was previously anticipated.

The updated outlook was based on new forecasts from the independent Office for Budget Responsibility, Hunt said.

A technical recession takes place when a country observes two consecutive quarters of contractions in its real GDP.

The Chancellor of the Exchequer said that the U.K. economy was "proving the doubters wrong," following earlier predictions, including from the Bank of England, that the country was facing its longest-ever recession.

In its revised outlook, the OBR said it predicts that the economy will contract by 0.2% this year. During the Autumn Statement last November, it had said that the economy would shrink by 1.4% in 2023.

The OBR also on Wednesday said that it expects inflation to fall to 2.9% by the end of 2023, meaning that the pace of price rises would be slower than anticipated and sit well below the highs of 11.1% recorded in October.

The rate of inflation currently stands at 10.1%, although the target level is 2%.

"They forecast we will meet the prime minister's priorities to halve inflation, reduce debt and get the economy growing," Hunt said.