Families “should be optimistic” that the worst of the cost of living crisis is over, the chancellor told Sky News.
Recognizing that households have “suffered enormously” from energy, food and fuel inflation over the past 18 months, Jeremy Hunt said they should now feel some relief despite the UK economy slowing in the third quarter of this year.
The latest economic data on GDP shows the economy is stagnating over the three months through September, with a slight contraction rounding to 0% growth.
The three largest sectors were almost equally moribund, with a 0.1% decline in services output offset by a similar increase in construction, with output completely flat.
Business investment, household and public sector spending declined at the same time, indicating that although high interest rates imposed by the bank of england tame inflation do their job, it comes at the cost of growth.
Despite this, the Chancellor welcomed the figures from the Office for National Statistics as good news, as they show the economy is not in recession.
He said: “I think they (families) can be more optimistic.
“I know how difficult it has been, but you can see the progress we are making in reducing inflation, which has been the main cause of pressure, as people have seen the cost of their weekly groceries rise, the cost from refueling the car goes up.
“But the message today is that the economy is more resilient than many people thought, and that gives us all hope for the future.
“With the Bank of England rightly maintaining higher interest rates in order to bring down inflation, the number one priority, one would expect there to be some impact on growth, but At the end of the day, if we can bring down inflation, that’s the best way to ensure long-term growth and that’s our plan.
Mr Hunt said his autumn budget statement, in two weeks, will be focused on growth, but indicated most measures will be medium-term and structural due to budgetary constraints.
He added: “The priority is to bring down inflation, so what you will hear in the autumn pro-growth statement are measures that will unlock the long-term competitiveness of the UK economy, create prosperity that will fund our NHS and public services, and reduce the tax burden over time, but we will not do anything that undermines the fight against inflation. »
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He also ruled out any tax cuts that would be “inflationary” – a pledge that will once again disappoint some Conservative backbenchers.
Mr Hunt said: “I can rule out any tax cuts that would fuel inflation. This is not the right thing to do when we are making such good progress in tackling inflation.
“In the long term we want to reduce the tax burden, there are no shortcuts, we need to be smarter in how we spend taxpayers’ money, reform the welfare system. These are difficult decisions long term what the Prime Minister and I must do.”
He denied that the halt to the UK’s biggest infrastructure project sent a signal that the government could not be trusted to deliver on its economic promises.
Mr Hunt said: “I think this kind of pessimism and declinism is simply wrong.
“Look what has happened since 2010, the UK economy has grown faster than Japan, France, Germany and some of the biggest economies, our technology sector is two times larger than that of Germany and three times that of France.
“There are huge assets here, part of which is infrastructure, and every penny saved on HS2 will be invested in other projects, to ensure the UK unlocks the remarkable potential we have.”