Hunt spins himself into a daze as economy falls into recession

Jeremy Hunt cut a solemn figure as he addressed the media in the wake of the latest economic data, which shows Britain fell into recession at the end of last year.

The Office for National Statistics (ONS) estimated that gross domestic product (GDP) fell by a worse-than-expected 0.3 per cent between October and December, following a decline of 0.1 per cent in the previous three months.

It means that the economy entered a technical recession, as defined by two or more quarters in a row of falling GDP.

It marks the first time the UK has entered recession since the first half of 2020, when the initial Covid-19 lockdown sent the economy plunging into reverse.

Economists said the recession is likely to be short-lived, with GDP expected to pick up from the start of 2024.

But the figures are damning for Rishi Sunak, who has vowed to grow the economy as one of his five priorities.

Shadow chancellor Rachel Reeves said his economic pledge has been left “in tatters”.

She said: “The Prime Minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off.

“This is Rishi Sunak’s recession and the news will be deeply worrying for families and business across Britain.”

Chancellor Jeremy Hunt said the contraction comes off the back of high inflation and the recent run of interest rate rises, but insisted the economy was turning a corner.

He said it was the “right thing to do” to prioritise tackling inflation.

Spinning himself into a daze, he told broadcasters: “We always expected growth to be weaker while we prioritised tackling inflation, that means higher interest rates, and that is the right thing to do because you can’t have long-term healthy growth with high inflation.

“The underlying picture here is an economy that is more resilient than most people predicted, inflation is coming down, real wages have been going up now for six months.

“If we stick to our guns, independent forecasters say that by the early summer we could start to see interest rates falling and that will be a very important relief for families with mortgages.”

Jack Peat

Jack is a business and economics journalist and the founder of The London Economic (TLE). He has contributed articles to VICE, Huffington Post and Independent and is a published author. Jack read History at the University of Wales, Bangor and has a Masters in Journalism from the University of Newcastle-upon-Tyne.