Jeremy Hunt says UK has a ‘vibrant future’ however there’s nonetheless work to do
Chancellor Jeremy Hunt says “better days lie ahead” after consultants tore up their forecasts of a recession this 12 months, as a substitute predicting the economic system will develop.
The International Monetary Fund upgraded Britain’s outlook from the worst performing nation within the G7 this 12 months.
And long run it tipped us to have stronger prospects than Germany, France and Italy.
The Chancellor mentioned the UK was making progress and has a “bright future” after sticking to the Government’s financial plan to deliver down inflation and debt.
Mr Hunt instructed the Daily Express: “The IMF has given a decisive vote of confidence in the British economy, our economic policy, and our plan to halve inflation and grow the economy.
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“Better days lie ahead if we stick to our plan, with confidence returning and our long-term growth prospects now brighter than those in Germany, France and Italy. That shows how we are taking advantage of Brexit’s opportunities, harnessing the technologies and industries of the future, and putting ourselves on the right path.
“While there are still challenges, we are making progress. We are a great country with a bright future – now let’s get on and deliver our plan. It’s what we were elected to do.”
The IMF believes the UK economic system will develop 0.4 p.c this 12 months. Last month it forecast a contraction of 0.3 p.c.
It mentioned measures introduced within the Budget to spice up childcare and assist for firms “should have a positive effect on medium-term growth”.
PM Rishi Sunak’s take care of Brussels on post-Brexit buying and selling was additionally credited with ending uncertainty, whereas an anticipated fall in power costs is tipped to result in a major drop in the price of dwelling.
Inflation figures out on Wednesday are anticipated to see it dip beneath 10 p.c for the primary time since July.
However, meals inflation is operating at 17.2 p.c, and Mr Hunt on Tuesday met meals producers to debate how one can deliver that down.
The Chancellor insisted the IMF’s evaluation confirmed the Government was heading in the right direction to “restore stability and tame inflation”.
He mentioned: “It praises our childcare reforms, the Windsor Framework and business investment incentives. But the job is not done yet.” Labour has beforehand mentioned bleak IMF forecasts show the Government is lurching from “crisis to crisis”.
IMF chief Kristalina Georgieva defended her economists from options they often learn the UK flawed.
She insisted the IMF projections are “slightly less pessimistic” than forecasts by the Bank of England and others. She mentioned: “We have gone through a very turbulent time…shock, upon shock, upon shock. That has created exceptional uncertainty.”
Ms Georgieva mentioned that regardless of the higher progress outlook, tax cuts aren’t “affordable” or “desirable”. Tory chairman Greg Hands mentioned: “Presumably all on the Left who quoted the IMF before will now welcome this revised forecast.”
Conservative MP Jacob Young mentioned it was “good news for our economy, bad news for those who are desperate for us to fail”.
Julian Jessop, economics fellow on the Institute of Economic Affairs, cautioned: “The large upgrade to the IMF’s forecast for the UK economy in just a month shows why we shouldn’t take these numbers too seriously.
“But the revision is consistent with other signs that the UK will dodge the recession so many feared. Unfortunately, growth is still expected to be sluggish. The UK economy is predicted to grow by an average of just 1.5 percent a year over the longer term.
“The IMF makes policy recommendations to boost productivity and growth. But many of these are politically difficult – such as easing planning restrictions and reducing barriers to business investment. The Government needs to be more ambitious.
The IMF report endorsed plugging skills shortages with foreign workers but said the UK should look at “fine-tuning the immigration system to alleviate sectoral and skilled labour shortages and enhance labour market flexibility”. Mr Sunak’s spokesman mentioned: “It’s good news the economy is growing.
“It requires discipline on Government spending and many other areas. The Government will stick to that plan.”