Prime Minister Rishi Sunak is insisting the UK economy has “turned a corner” despite the threat of a technical recession looming.
Britons will discover whether the country has fallen into an economic downturn by the end of the week, when the Office for National Statistics (ONS) publishes the fourth quarter’s gross domestic product (GDP) figures.
A recession is defined as happening to a country or bloc if the economy experiences two quarters of negative economic growth.
It is widely forecast that the ONS’ assessment of fourth-quarter activity will show that the economy contracted by 0.1 per cent.
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Sunak insists the economy has 'turned a corner'
The UK economy contracted by 0.1 per cent in the third quarter which was revised from an estimate of no growth.
If this comes to be a reality, the country would have been in a technical recession during the latter half of 2023.
Despite this concern, Rishi Sunak was adamant that the economy has improved despite households experiencing an “undoubtedly difficult” time.
Speaking to reporters in Harrogate, he explained: “At the start of this year I really believe the economy has turned a corner and we are heading in the right direction.
“You can see inflation has come down from 11 per cent to four per cent, mortgage rates are starting to come down, wages have been rising consistently now.”
According to Mr Sunak, the recent cut to National Insurance is evidence that his economic plan “is working”.
At the beginning of January, the rate of National Insurance was slashed from 12 per cent to 10 per cent which the Government claimed would save the average worker £450 a year.
When asked whether a technical recession would affect the possibility of more tax cuts, the Prime Minster declined to answer.
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What is a Recession? GB NEWSEarlier today, secretary minister Tom Tugendhat told ITV’s Good Morning Britain that it is “no great secret” the Government has experienced a “challenging time”.
The minister claimed the Government was making “difficult decisions” when probed over the possibility of a recession.
Mr Tugendhat said: “The reality is this is a really challenging time for the Government. There’s no great secret in that.
“But what is also true is that there’s an awful lot that we’ve got to do to make sure we’re looking after the British people.
“The whole point about government is to take difficult decisions and to make sure we’re delivering, and that’s why the priorities the Prime Minister set out, including bringing down inflation and supporting growth, are so important.”