THE BRITISH economy will dodge a recession this year but its growth over the next five years is projected to be more modest than previously hoped.
Chancellor Jeremy Hunt told MPs how last autumn the Office for Budget Responsibility had forecast a recession, in which the economy was expected to shrink by 1.4 per cent in 2023.
He then quipped: “Instead, it grew. In fact it has grown faster than the Euro area.
“Revised numbers from the ONS (Office for National Statistics) now say the economy is 1.8 per cent larger than pre-pandemic.”
But in 2024 growth is forecast to be 0.7 per cent rather than the 1.8 per centexpected at the time of the Budget, 2025 is expected to see 1.4 per cent rather than 2.5 per centand 2026 could be 1.9 per cent instead of 2.1 per cent.
Growth is then expected to go beyond the previous forecast, with 2 per cent in 2027, slightly above the 1.9 per cent predicted in March, with 1.7 per cent in 2028.
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Mr Hunt insisted that in order for those numbers to grow, "we need higher productivity".
He went on: "The private sector is more productive in countries like the United States, Germany and France because it invests more – on average 2 percentage points more of GDP every year.
"The 110 measures I take today help close that gap by boosting business investment by £20bn a year.
"They do not involve borrowing more and ramping up debt as some advocate."
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In his Autumn Statement Jeremy Hunt announced:
- The biggest ever price hike for tobacco products
- A major win for The Sun's Save Our Sups campaign with alcohol duty frozen
- A major benefit change for renters on Universal Credit
- A £10,000 energy bill discount for Brits living near pylons
- A £350 income boost for self-employed workers
- A £470 payment boost for millions on Universal Credit
- Millions will be stripped of benefits under harsh new rules
- Nurses will save £500 in a personal income tax cut
- No fuel duty hike in huge relief for drivers
Tory former Cabinet minister Sir Jacob Rees-Mogg later questioned the OBR'srecord of forecasting accurately.
He asked the Chancellor:“Has he given any consideration or has the Treasury carried out an analysis of the effect of on economic policy of mistaken forecasts from the OBR?"
Mr Hunt insisted it was not juts the OBR that had a wrong forecast, adding: "It was nearly every commentator, the Bank of England, the International Monetary Fund, and I am pleased to say that in every single case, they have found that the British economy has outperformed their expectations."
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