Treasurer Jeremy Hunt insisted the plan to halve inflation was “working” despite expectations that future interest rate hikes and soaring utility bills would cause further pain to household budgets.
Over the summer, the UK economy grew by 0.5% in June, causing inflation to fall to 6.8%, its lowest level in a year.
However, the Bank of England expects inflation to reach 7.1% later this month and fall to around 5% by the end of the year.
Mr Hunt said he was aware that household budgets remained tight, but added: “We are on track to halve inflation this year and sticking to our plans will reduce the pressure on families and businesses alike. “It can be alleviated,” he said.
“And that is not surprising, despite some doubts. The latest statistics show that our country has recovered better than many other G7 countries and that investment It is one of the most attractive countries in the world.”
But Labor said the comments were “completely out of touch” with the economic hardship facing families.
As Parliament returns from its summer recess, the Prime Minister has promised to “increase productivity” in the public sector.
Mr Hunt will also crack down on the time civil servants spend on “non-core tasks” and administration, and analyze where staff spend their time to improve efficiency and save money.
“This Government is unlocking Britain’s potential, attracting more investment, creating new jobs and growing the economy,” he added.
The Treasury statement added that the government was committed to continuing “economic growth” and outlined efforts to establish 12 investment zones across the UK to support what it called “growth industries”. . In South Yorkshire, the first investment area is said to have attracted more than £80m of private investment, which the Treasury says will create more than 8,000 jobs by 2030.
Similarly, it will amend its spending policy for businesses to “boost investment in the UK”, amounting to £27 billion in tax cuts.
But Labor argued that the move from “no growth” to “low growth” was not something to celebrate.
The party also expressed concern about the plight of homeowners facing high utility bills, which are expected to rise again this fall.
New energy price caps will reduce household bills by an average of 7%, but energy analysts Cornwall Insight predicts prices will remain high in 2024 as government energy tariff subsidies end. , customers expect to end up paying more.
Rachel Reeves, Labor’s shadow chancellor, said: “Jeremy Hunt’s comments are completely out of touch with the economic realities facing families across the UK.”
“Going from no growth to low growth does not deserve a victory lap and should not be the pinnacle of our ambitions.
“After 13 years of economic collapse, the Conservatives have wrecked the economy and made working people’s lives even worse with higher taxes, higher mortgages and higher bills. Britain will be in turmoil for another five years under Conservative government. We cannot afford to risk continued instability.
“Labour’s economic plan is to invest in Britain to unlock growth, reduce household spending and improve the lives of working people across the country.”