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| UK economy to avoid recession, says Hunt | |
| (32 minutes later) | |
| The UK economy is set to shrink this year but avoid a technical recession, according to the government's independent forecaster. | |
| The Office for Budget Responsibility (OBR) now expects the size of the economy to fall by 0.2% in 2023. | |
| But it will escape the usual definition of a recession, which is two consecutive three-month periods of decline, Chancellor Jeremy Hunt said. | |
| It came as he set out the government's growth plans in the Budget. | |
| The OBR also said inflation would more than halve to 2.9% by the end of 2023. | The OBR also said inflation would more than halve to 2.9% by the end of 2023. |
| Inflation - the rate at which prices are rising - is currently in double digits, driven by soaring food and energy prices. | Inflation - the rate at which prices are rising - is currently in double digits, driven by soaring food and energy prices. |
| Budget 2023: Key points at-a-glance | |
| In a growing economy, the value of the goods and services that the country produces - measured by gross domestic product (GDP) - increases each quarter. | In a growing economy, the value of the goods and services that the country produces - measured by gross domestic product (GDP) - increases each quarter. |
| It is a sign that people are doing more work and, on average, getting a little bit richer. | It is a sign that people are doing more work and, on average, getting a little bit richer. |
| But sometimes the level of GDP falls, and that is a sign that the economy is doing badly. | But sometimes the level of GDP falls, and that is a sign that the economy is doing badly. |
| The OBR said the economy was still likely to shrink this year, but by less than it previously thought. | The OBR said the economy was still likely to shrink this year, but by less than it previously thought. |
| It now expects GDP to fall by 0.2% in 2023, having predicted a 1.4% drop six months ago. | It now expects GDP to fall by 0.2% in 2023, having predicted a 1.4% drop six months ago. |
| "After this year the UK economy will grow in every single year of the forecast period: by 1.8% in 2024; 2.5% in 2025; 2.1% in 2026; and 1.9% in 2027," Mr Hunt said. | "After this year the UK economy will grow in every single year of the forecast period: by 1.8% in 2024; 2.5% in 2025; 2.1% in 2026; and 1.9% in 2027," Mr Hunt said. |
| Mr Hunt said the economy was "proving the doubters wrong", despite growth remaining lacklustre this year. | |
| The growth forecasts for 2025, 2026 and 2027 are also downgrades compared with what the OBR was expecting six months ago. | |
| The chancellor also said the UK was on track to meet the government's self-imposed fiscal rules. | |
| "At the Autumn Statement I also announced that public sector net borrowing must be below 3% of GDP over [five years' time]," Mr Hunt said. | |
| "The OBR confirm today that we are meeting that rule with a buffer of £39.2bn. In fact our deficit falls in every single year of the forecast." | |
| Related Topics | Related Topics |
| Economics | Economics |
| UK economy | UK economy |
| Jeremy Hunt | Jeremy Hunt |
| Budget 2023 | Budget 2023 |