eremy hunt pledged to “address the cost of living crisis” and “rebuild our economy,” while outlining plans for tax increases and spending cuts.
The chancellor said there would be a “shallower downturn” as a result of his measures, but the Budget Responsibility Office (OBR) believed the economy was “now in recession”.
He told MPs his three priorities were “stability, growth and public services,” as he made his fall statement.
The OBR predicted the UK economy would contract by 1.4% next year, Hunt said.
“The OBR forecasts UK inflation to be 9.1% this year and 7.4% next year,” he said.
“They confirm that our actions today will help bring inflation down sharply from the middle of next year.
“They also judge that the UK, like other countries, is now in a recession. Overall, the economy will still grow at 4.2% this year.
“GDP (gross domestic product) then falls by 1.4% in 2023, before rising by 1.3%, 2.6% and 2.7% in the following three years.
“The OBR says higher energy prices explain most of the downward revision in cumulative growth since March.
“They also expect unemployment to rise from 3.6% today to 4.9% in 2024, before falling to 4.1%.”
Mr Hunt presented a package of £30bn in spending cuts and £24bn in tax increases over the next five years.
His package stands in stark contrast to his predecessor Kwasi Kwarteng’s ill-fated plan for £45bn in tax cuts less than two months ago. – lived administration.
Mr Hunt said: “I understand the motivation of my predecessor’s mini budget and he was right in identifying growth as a priority. But uncovered tax cuts are just as risky as uncovered spending.”