British Chancellor of the Exchequer Jeremy Hunt said the British economy will not enter a technical recession in 2023, while announcing the government’s spring budget.
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LONDON – Britain’s economy will not enter a technical recession in 2023, as previously expected, UK Finance Minister Jeremy Hunt said on Wednesday.
The updated outlook is based on new forecasts from the independent Office for Budget Responsibility, Hunt said.
A technical recession occurs when a country’s real GDP contracts for two consecutive quarters.
Britain’s economy is “proving doubters wrong,” the chancellor said, with previous forecasts including from the Bank of England that the country was facing its own crisis. The longest recession on record.
In its revised outlook, the OBR said it expected the economy to contract by 0.2% this year. In its autumn statement in November, it had said the economy would shrink by 1.4% in 2023.
The OBR also said on Wednesday that it expects inflation to fall to 2.9% by the end of 2023, implying a slower-than-expected pace of price increases and well off the high of 11.1% hit in October.
The current inflation rate is 10.1%, and the target level is 2%.
“They predict we will achieve the prime minister’s priorities of halving inflation, reducing debt and boosting economic growth,” Hunt said.