New figures for the UK economy represent a glimmer of hope as Jeremy Hunt warned strikes will hold growth back.
UK plc expanded by 0.5 percent in October, a promising sign for an economy that experienced a fall the previous month, which included a bank holiday for the Queen’s funeral.
Despite signs of optimism, the Chancellor warned there is a “tough road ahead” as the UK approaches a recession.
The Chancellor says the UK is trying to keep a stable economy while contending with a 'challenging international picture'.
Stefan Rousseau
The Office for National Statistics (ONS) suggest the economy shrank by 0.3 percent in the three months leading to October.
Jeremy Hunt said the economic outlook is “likely to get worse before it gets better” in the UK, with mass industrial action likely to stagnate growth.
He said: “I think it’s a very challenging international picture. About a third of the world’s economies are predicted to be in recession, either this year or next.
“We’re no different in this country and truthfully, it is likely to get worse before it gets better, which makes it even more difficult when we have big public sector strikes going on at the moment.”
He told Sky News the Government must “stay on course” and carry out its measures he outlined in the Autumn Statement.
The Bank of England is likely to hike interest rates again.
Kirsty O'Connor
In a separate statement published by the Treasury, Mr Hunt said: “High inflation, exacerbated by Putin’s illegal war, is slowing growth across the world, with the IMF predicting a third of the world economy will be in recession this year or next.
“While today’s figures show some growth, I want to be honest that there is a tough road ahead. Like the rest of Europe, we are not immune from the aftershocks of Covid-19, Putin’s war and high global gas prices.
“Our plan has restored economic stability and will help drive down inflation next year, but also lay the foundations for long-term growth through continued record investment in new infrastructure, science and innovation.”
Interest rates are likely to grow again on Thursday as the Bank of England looks to reduce sky-high inflation.
A rise from three percent to three point five percent is expected by economics, which would represent the highest level for 14 years.