Britain is “now in recession”, Jeremy Hunt has told MPs as he unveils his plan for more tax rises and spending cuts.
Speaking during his autumn budget the chancellor said the Office for Budget Responsibility believes the economy is now contracting.
A recession occurs when the economy shrinks for two consecutive quarters.
On Wednesday the Bank of England governor Andrew Bailey described the UK’s economic record in recent years as “not a good story” and said its performance was dramatically behind that of the US and eurozone.
The slide into recession is particularly notable because the UK economy is still yet to recover to its pre-pandemic level despite the US and eurozone both having done so.
“The OBR forecasts the UK’s inflation rate to be 9.1 per cent this year and 7.4 per cent next year,” Mr Hunt told the Commons.
“They confirm that our actions today help action to fall sharply from the middle of next year. They also judge that the UK, like other countries, is now in recession.”
“Overall this year the economy is still forecast to grow by 4.2 per cent. GDP then falls by in 2023 by 1.4 per cent, before rising by 1.3 per cent.”
