Rishi Sunak was dealt a blow after revised figures showed Britain’s economy was worse than previously thought, contracting between July and September.
The prime minister listed economic growth as one of his five key promises to voters at the start of the year.
In another setback to the Conservative Party leader’s goals, the government statistics watchdog has revised downward its forecast for Britain’s economic performance this year.
The Office for National Statistics (ONS) announced that gross domestic product (GDP) fell by 0.1% in the three months to September, a downward revision from previous forecasts that it would remain flat.
It also announced that the UK’s GDP did not grow at all between April and June, compared to previous forecasts of a 0.2% increase.
Labor slammed Mr Sunak’s “legacy of failure” and promised Sir Keir Starmer would revive Britain’s fortunes.
Shadow Chancellor Rachel Reeves said: ‘Rishi Sunak failed to defeat Liz Truss, failed to reduce waiting lists, failed to stop the ship and now failed to grow the economy. ” he said.
Rachel Reeves says Rishi Sunak’s legacy is ‘one of failure’
(PA wire)
He added: “Thirteen years of economic collapse under the Conservative government has made working people’s lives even worse, with soaring bills, mortgages and store prices.”
But Jeremy Hunt said the outlook for the UK economy was “much more optimistic than these numbers suggest”. The Prime Minister this week said inflation would fall further and tax cuts announced in the Autumn Statement would boost economic growth.
Mr Sunak said: “Of course we want to see more growth” but said the UK economy was “doing better” than expected in early 2023, adding that the UK was growing faster than other European countries. insisted.
The Prime Minister also welcomed the planned National Insurance tax cuts in January. “We’ve done a good job of fighting inflation, so we’re able to get a tax cut for families. This tax cut is important,” he told reporters. “That will put more money in the pockets of families across the country.”
Prime Minister Jeremy Hunt insisted the UK’s outlook was “much more optimistic than these numbers suggest”.
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Mr Hunt said 2024 should be the year “we need to move on from pessimism and slowdown talk”, suggesting higher-than-expected inflation should allow the Bank of England to cut interest rates early next year.
The Prime Minister said: financial times“If we stick with the course we’re on now, there’s a good chance we can keep inflation under control. The Bank of England may decide it can start cutting interest rates.”
The Trades Union Congress (TUC) said the growth figures were “disastrous” and said the UK was now stuck in a “loop of ruin” and “totter on the brink of recession”.
Union leader Paul Nowak said: Our economy is stuck in a loop of ruin, and working people are paying the price through rising unemployment and declining living standards. ”
The ONS said the recent decline in GDP was due to a decline in the services sector, including retail and hospitality.
The latest figures mean the chancellor ended the year failing to deliver on all of his other pledges, apart from overseeing halving inflation. We will stop small boats from crossing the Channel, reduce the national debt, reduce NHS waiting lists and grow the economy.
Earlier this week, Mr Sunak sought to renege on his promise to “stop the boats”, claiming there was no “firm date” for that promise.
Mr Sunak, who was pursued by the council’s powerful liaison committee, said there was no “exact date” as to when the crossing would be stopped. “We will continue until [stop the boats]’ he claimed.