Chancellor Jeremy Hunt has insisted that his plan to halve inflation is “working” despite further expected interest rate hikes and rising energy bills set to inflict more pain on households.
Over the summer months, inflation figures fell to 6.8 per cent – its lowest level in over a year – with the UK economy growing by 0.5 per cent in June.
However, the Bank of England anticipates inflation will reach 7.1 per cent later this month and, with numbers expected to fall to around five per cent by the end of the year.
Mr Hunt said he knew family budgets were still stretched, but he insisted “we are on track to halve inflation this year and by sticking to our plan we will ease the pressure on families and businesses alike”.
Chancellor Jeremy Hunt has insisted that his plan to halve inflation is ‘working’— (PA)
“And it should be no surprise, despite the doubting from some. Latest figures show we have bounced back better than many other G7 economies and are one of the most attractive countries in the world to invest.”
But Labour said the comments were “completely out of touch” with the financial struggles faced by families.
As parliament returns from summer recess, the chancellor pledged to “improve productivity” in the public sector.
Mr Hunt will also crack down on the hours civil servants spend on “non-core work” and admin and will analyse where staff are spending their time to streamline efficiency and save money.
“This government is unlocking the UK’s potential – attracting more investment, creating new jobs and growing the economy,” he added.
A statement from the Treasury added that the government was committing to continuing “economic growth”, outlining its efforts to establish 12 investment zones across the UK to support what it calls “growth industries”. In South Yorkshire, the first investment zone has purportedly gathered over £80m in private investment, which the Treasury says will create over 8,000 jobs by 2030.
Similarly, it has revised its expensing policies for businesses in an effort to “drive investment in the UK”, equating to a £27bn tax cut.
However, Labour argued that moving from “no growth to low growth” was no cause for celebration.
The party also expressed concern over the plight of homeowners facing sky-high energy bills, which are set to rise again this autumn.
Although the new energy price cap will see household bills decrease by an average of 7 per cent, energy analyst Cornwall Insight anticipates that they will remain high in 2024 and customers will end up paying more because the government’s energy bill support payments have ended.
“Jeremy Hunt’s comments are completely out of touch to the economic realities facing families across Britain”, Rachel Reeves MP, Labour’s shadow chancellor said.
“Going from no growth to low growth doesn’t merit a victory lap and shouldn’t be the summit of our ambitions.
“After 13 years of economic failure, the Conservatives crashed the economy and left working people worse off, with higher taxes, higher mortgages and higher bills. Britain cannot risk another five more years of chaos and instability under the Conservatives.
“Labour’s plan for the economy is about investing in Britain so we can unlock growth, cut household bills and make working people in all parts of the country better off.”
