Jeremy Hunt says UK economic growth forecast downgraded in blow to Rishi Sunak government

livemint.com:

UK’s economic growth forecasts had been downgraded, a blow for Rishi Sunak’s government going into an expected general election next year. The economy is due to grow 0.7% in 2024 and 1.4% in 2025, Hunt said in the House of Commons on Wednesday as he delivered his Autumn Statement, citing forecasts from the Office for Budget Responsibility. The OBR had previously forecast 1.8% growth for 2024 and 2.5% for 2025.

The worsened outlook is why Hunt has talked up his fiscal statement as focusing on growth. It’s a pivotal moment for both Hunt and Prime Minister Rishi Sunak as they try to close a poll gap of about 20 points to the opposition Labour Party ahead of a general election expected next year. “Our choice is not big government, high spending and high tax because we know that leads to less growth, not more," Hunt said.

“Instead we reduce debt, cut taxes and reward work." Hunt is expected to extend a 100% tax relief on capital spending to spur investment, and announce supply-side reforms like speeding up connections to the electricity grid and encouraging more people to return to the workforce. On spending decisions, Hunt said he would raise welfare payments in line with September’s inflation figure rather than October’s lower reading, a prospect that had sparked concern among some of his MPs who worried about the impact on voters during a cost of living crisis. He also maintained the pensions triple lock, deciding not to use a lower pay figure for the latest uprating.