Budget 2023: Jeremy Hunt says UK will avoid recession this year
Jeremy Hunt has said the British economy will avoid a technical recession this year while announcing an extension in financial support for households struggling with the cost of living crisis.
In a statement to the Commons aiming to reboot Britain’s faltering economy, the chancellor said he would prioritise support for parents with childcare costs alongside a multibillion-pound package of tax breaks for business to encourage investment.
However, updated forecasts from the Office for Budget Responsibility (OBR), the government’s tax and spending watchdog, showed the economy would still shrink by 0.2% in 2023 even though it would avoid two consecutive quarters of contraction – the technical definition of a recession.
The government earlier on Wednesday confirmed that its energy price guarantee supporting households would continue to cap the typical annual gas and electricity bill to £2,500 per customer until the end of June, in a widely expected move.
Hunt outlined his plans for the nation’s finances against a backdrop of mounting turbulence in global financial markets as banking shares were rocked by concerns about Credit Suisse, one of Europe’s biggest lenders, extending days of turmoil triggered by the collapse of the US lender Silicon Valley Bank.
In a well-trailed budget statement, the chancellor said measures he was taking would bring down inflation while “helping people struggling during tough times”.
The OBR said inflation was forecast to fall by more than half, from a peak of 10.7% last autumn – the highest rate since the early 1980s – to 2.9% by the end of the year, in a widely expected upgrade after estimates last made in November.
The government will freeze fuel duty for motorists, as well as beer duties, alongside
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