| 19 June 2024, Wednesday |

UK finance minister Hunt says inflation is on track to come down

British Finance Minister Jeremy Hunt said on Saturday that inflation is on pace to be cut in half by the end of 2023, promising to work on the target as he laid out his goals ahead of parliament’s resumption following the summer recess.

Britain’s inflation rate is expected to decline to around 5% by the end of the year, half of what it was in January, and hitting the objective would mean completing one of Prime Minister Rishi Sunak’s five important commitments to voters for 2023.

In a statement, Hunt stated that when inflation falls, pressure on household budgets will begin to lessen. He also emphasized his attempts to raise productivity in the public sector in order to promote GDP.

Hunt and Sunak are keen for voters to start feeling more optimistic about the economy as the country heads for an election expected next year, with the opposition Labour Party currently far ahead in the polls.

“We are on track to halve inflation this year and by sticking to our plan we will ease the pressure on families and businesses alike,” Hunt said, ahead of lawmakers returning to parliament on Monday.

For July, Britain’s annual consumer price inflation rate cooled to 6.8% – still the highest rate among the Group of Seven economies.

“I do think we may see a blip in inflation in September but after that the Bank of England is saying it will fall down to around 5%,” Hunt told the BBC on Sunday.

The Bank of England expects inflation to decrease to 4.9% by the end of the year, a quicker reduction than it forecasted in May.

Hunt’s persistent emphasis on inflation will disappoint some members of the ruling Conservative Party who have advocated for tax cuts ahead of the election, citing the fact that British tax collections are the greatest as a percentage of the economy since the 1940s.

Revised economic figures released on Friday delivered a welcome boost to the administration, indicating that the economy recovered from the epidemic faster than originally expected.

  • Reuters