Rishi Sunak’s woes have continued to pile up after the Office of National Statistics (ONS) suggested that the UK is in a technical recession.
The revised figures for the final three months of 2023 show that the economy shrank by 0.3%, three times worse than the first estimate.
It means that the economy had decreased two quarters in a row and overall growth from the end of 2022 was just 0.1%.
Growing the economy was one of Rishi Sunak’s key five pledges to the British people at the start of 2023 which he claimed he would be judged by.
With NHS waiting lists still growing and a failure to stop the small boats also on the list of five the figures today are a blow to Mr Sunak and the Tories in an election year.
But in his reaction this morning Chancellor Jeremy Hunt pointed out that one of the other priorities, halving inflation, has been achieved.
Mr Hunt said: “Last year was tough as interest rates had to rise to bring down inflation, but we can see our plan is working. Inflation has fallen decisively from over 11% to 3.4%, the economy grew in January and real wages have increased for eight months in a row.
“Our cuts to National Insurance will boost growth by rewarding work and putting over £900 a year back into the average earner’s pocket.”
The Treasury release also pointed out that the Office of Budgetary Responsibility (OBR) predicts that the economy will grow 0.8% this year and 1.9% next year – 0.5% higher than their autumn forecast. After that growth rises to 2%, 1.8%, and 1.7% in 2028.
Mr Sunak has also insisted that “the plan is working” as he faces criticism from his own Tory backbenchers over Labour’s lead of around 20% in the polls.
Rachel Reeves MP, Labour’s Shadow Chancellor, responding to the Office for National Statistics’ confirmation that Britain has entered recession, said: “Rishi Sunak has broken his promise to grow the economy and left Britain in recession with working people paying the price. The Conservatives cannot claim that their plan is working or that they have turned the corner on more than fourteen years of economic failure.
“It is time for a change. Rishi Sunak should name the date for the election and give the British people the chance to vote for a changed Labour Party that has a long-term plan to grow the economy.”
