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Jeremy Hunt has been accused of downplaying economic growth, saying he would be willing to trigger a recession if necessary to keep inflation under control.
The prime minister said the Bank of England was right to raise interest rates to keep inflation in check as a signal that Conservative MPs were not ready to stimulate the economy with tax cuts.
Critics, however, have accused the economy of ignoring economic growth, which has fallen to near zero and is expected to grow at just 1% a year from 2024 to 2025.
Labor Shadow Finance Minister James Murray said: “It is no surprise that the Prime Minister seems uninterested in economic growth. After 13 years of Conservative government, we are stuck in a cycle of low growth and high taxes.
“Never before have people paid so much for so little in return. Conservatives have consistently failed to recognize the impact of the cost of living crisis on families and businesses across the country. The Labor Party will always put the working people first, save the households and grow the economy.”
Liberal Democrat deputy leader Daisy Cooper said: “This would be a recession driven by Downing Street. Rishi Sunak’s promises to grow the economy have fallen apart.”
Inflation fell below double digits for the first time since last year, but remained surprisingly high at 8.7% despite an upward revision to GDP growth forecasts.
The Bank of England is set to raise interest rates further in an attempt to keep inflation under control, which will force consumers to spend a higher percentage of their income on debt service, thus reducing consumer spending power.
Asked if he would risk a recession to keep inflation down, Hunt told Sky News: “Yes, because inflation is the source of instability, after all.” If we want to achieve prosperity, grow our economy and reduce the risk of recession, we must support the difficult decisions the Bank of England is making.
“I have other things to do, which is to ensure my decisions as prime minister. I want to balance the books so that the markets and the world can see that Britain is a country that can live up to its responsibilities. It’s a very difficult decision to align, all these things.” This means that the Bank of England’s monetary policy (and) the Prime Minister’s fiscal policy are in line. “
Norman Lamont, who was Prime Minister under Sir John Major, also supported him. The long-term health of the economy depends on whether inflation falls. “
Britain is expected to grow 0.3% this year, without two consecutive quarters of negative growth, the usual definition of a recession, according to the International Monetary Fund.
