UK's Hunt says budget plan likely to show recession ahead

Chancellor says he will work in co-operation with the Bank of England to control inflation

Chancellor of the Exchequer Jeremy Hunt will look to bring down inflation ahead of a full budget this month. PA.
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The UK's Chancellor of the Exchequer Jeremy Hunt said the budget plan he is set to announce on Thursday will include forecasts similar to those of the Bank of England which issued a warning of a long recession ahead.

"I think it's very likely ... the question is not really whether we're in recession, but what we can do to make it shorter and shallower," Mr Hunt said.

Mr Hunt is trying to repair Britain's public finances - and its tarnished credibility among investors - in a first budget plan since Rishi Sunak replaced Liz Truss as prime minister with a vow to undo her economic policy mistakes.

"We're all going to be paying a bit more tax, I'm afraid," he told Sky News, while refusing to be drawn into details on the figures, after a tax-cutting budget by Ms Truss caused panic on financial markets.

Mr Hunt said he would seek to work in co-operation with the Bank to control inflation and the global rise in interest rates, which is adding to the strains on Britain's economy.

"The number one thing that I can do is help the Bank of England bring down inflation," he told The Times newspaper, adding that he wanted to give confidence to businesses and households to invest and spend.

"If I can give them certainty that we have a plan to tackle inflation, to bring back stability to the economy then that will be job done, as far as Thursday is concerned."

Mr Hunt was likely to commit only £20 billion ($23.7 billion) to extend the government's energy bills cap for a further six months after April, a third of its estimated £60bn cost in its first six months, meaning bills were likely to rise.

But he was also considering a multi-billion-pound package of support to shield pensioners and benefit claimants from higher power bills, the Times said.

Updated: November 13, 2022, 10:25 AM
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