Jeremy Hunt: Inflation is ‘single greatest barrier to growth’ as UK economy flatlines
Chancellor Jeremy Hunt vowed to redouble efforts in the battle against inflation after this morning’s GDP figures showed a flatlining economy.
The chancellor called price rises the “single greatest barrier” to growth after the Office for National Statistics revealed the UK economy grew by 0.0 per cent in the third quarter – thereby avoiding a recession this year.
This comes as Hunt prepares to deliver his Autumn statement later this month, with calls being made to support businesses in the final quarter of the year.
Writing on X, the site formerly known as Twitter, Hunt said: “High inflation is the single greatest barrier to economic growth – the best way to sustainably grow our economy right now is to stick to our plan and knock inflation back. That’s what we’re doing.”
“The Autumn Statement will be about how we get the economy growing healthily again for the long term – unlocking investment, getting people back into work and making our economy more productive.”
Chancellor Hunt is due to give his Autumn statement on 22 November, with business groups saying he should take action to reduce inactivity in the workforce.
In a submission to the Treasury ahead of next month’s Autumn Statement, the Federation for Small Businesses (FSB) argued Jeremy Hunt needed to take measures to reduce health-related labour market inactivity.
This morning, after the GDP figures were released, Muniya Barua, deputy chief executive at BusinessLDN urged the government to use incentives for tourists and the labour market to promote growth, saying: “All eyes will now be on the Chancellor’s Autumn Statement to help Britain break out of its low-growth trap.”
“Restoring VAT-free shopping for international visitors would be a quick win with rapid payback for the Exchequer by boosting tourist numbers and spending in the capital. Making childcare more affordable and accessible for families would help more people return to the labour market. And committing long-term capital funding for Transport for London will keep the capital moving, enabling it to play its full part in the UK’s economic recovery,” she said.
Other analysis warned that flatlining growth and high inflation may ramp up fears of stagflation.
Labour’s shadow chancellor responded to the figures, saying: “These figures are further evidence that the economy is not working.”
She added: “At the start of the year, Rishi Sunak and Jeremy Hunt promised to get the economy growing. These figures show that growth is flatlining and the British people are paying the price, with 25 Tory tax rises and higher mortgages.
“Labour has a plan to make working people in all parts of the country better off by growing the economy, boosting wages and bringing down bills.”
The Bank of England, which sets interest rates independently of the government, chose to hold them at 5.25 per cent when it last met.
When its rate-setting body, the Monetary Policy Committee, meets on Thursday 14 December, it will weigh up flatlining growth with inflation statistics, due to be released by the ONS on 20 November.