British economy ‘not out of the woods’ yet – chancellor

The UK economy is not yet clear of difficulty, Chancellor of the Exchequer Jeremy Hunt warned on Friday, following the release of data showing the nation had narrowly avoided a recession.

According to the Office for National Statistics, GDP showed zero growth in the final quarter of 2022, and a month-on-month decline of 0.5% in December.

“The fact the UK was the fastest growing economy in the G7 last year, as well as avoiding a recession, shows our economy is more resilient than many feared,” Hunt told the Guardian.

The economy shrank 0.3% in the third quarter of last year. Another contraction would have meant a technical recession – defined by two consecutive quarters of decline.

“However, we are not out (of) the woods yet, particularly when it comes to inflation,” the chancellor stressed. “If we stick to our plan to halve inflation this year, we can be confident of having amongst the best prospects for growth of anywhere in Europe.”

According to the latest outlook issued by the Bank of England, the UK will enter a recession in 2023, but it will be “shallower” than previously predicted.

Meanwhile, the National Institute of Economic and Social Research (NIESR) has warned that this year will feel like a recession for many, due to a severe cost-of-living crisis, with soaring inflation, borrowing costs and energy bills.

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