U.K. Treasury Chief Predicts No Recession in Britain This Year

London (AP) —
U.K. Treasury Chief Jeremy Hunt poses for the media with his traditional red ministerial box as he leaves 11 Downing Street, in London, Wednesday, March 15. (AP Photo/Frank Augstein)

U.K. Treasury Chief Jeremy Hunt is staging a moment of high political theater Wednesday, unveiling his budget to a crowd of lawmakers as consumers demand more help with the high cost of living and workers press for higher wages with strikes at schools, hospitals and the offices of civil servants.

Even as Hunt plays his historically scripted role — emerging from his official residence with the spending plan in a battered red dispatch box, then carrying it to the House of Commons where he was greeted by jeers and cheers — the truth is he sought to be as boring as possible.

That’s because the last time the government staged a similar “fiscal event,” the mini-budget presented by Hunt’s predecessor last September, it set off an economic catastrophe by promising huge tax cuts without saying how it would pay for them. The value of the pound plunged, mortgage rates soared and the central bank was forced to intervene to protect pension funds.

This time, strong and stable is the goal. He predicted the country will not enter a technical recession this year and that the government will “take whatever steps are necessary for economic stability.’’

“Today the Office for Budget Responsibility forecast that because of changing international factors and the measures I take, the U.K. will not now enter a technical recession this year,’’ he told the House of Commons on Wednesday.

At one point, he even offered funding for the “curse” of potholes, handing over 200 million pounds ($241 million) to local communities to get rid of them.

He added that Britain’s independent budget watchdog “forecast we will meet the Prime Minister’s priorities to halve inflation, reduce debt and get the economy growing. We are following the plan and the plan is working. But that’s not all we’ve done.’’

There have been predictions that the country would dip into recession in part because of record inflation and rising energy prices due to the war in Ukraine.

Most of the big-ticket items in the budget — an extra 5 billion pounds ($6.1 billion) of defense spending over the next two years, increased funding for child care and help for workers saving for retirement — have already been announced.

Consumer prices rose 10.1% in the year through January, the fifth consecutive month of double-digit increases. To combat inflation, the Bank of England has approved 10 interest rate increases over the past 15 months, raising the cost of mortgages, consumer and business loans.

That is crimping economic growth, with the central bank forecasting a recession that may last a year or more.

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