eremy Hunt has renewed his commitment to halving inflation as families grapple with the cost-of-living crisis after figures suggested the UK economy recovered from the pandemic faster than expected.
In a message aimed at reassurance ahead of the next fiscal event, the Chancellor acknowledged the lingering pressure on household budgets but insisted the Government’s plan to cut Consumer Price Index (CPI) inflation is working.
Labour said the comments were “completely out of touch” with the economic realities faced by families across the UK.
Mr Hunt said in a statement: “As we move into autumn, I know family budgets are still stretched, but inflation is coming down, and now is the time to see the job through.
“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.
“And it should be no surprise, despite the doubting from some. Latest figures show we have bounced back better than many other G7 economies and are one of the most attractive countries in the world to invest.”
The Treasury added that limiting spending is seen as key to keeping interest rates down and Mr Hunt will be continuing his “public sector reform” programme aimed at making the state more efficient.
Shadow chancellor Rachel Reeves said: “Jeremy Hunt’s comments are completely out of touch to the economic realities facing families across Britain.
“Going from no growth to low growth doesn’t merit a victory lap and shouldn’t be the summit of our ambitions.
“After 13 years of economic failure the Conservatives crashed the economy and left working people worse off, with higher taxes, higher mortgages and higher bills.”
It comes after the Office for National Statistics said it was revising its estimate for gross domestic product (GDP) for 2021 after getting access to new data suggesting Britain’s economy had already returned to its pre-Covid levels by then.
By the last three months of 2021, the economy is now estimated to have been 0.6% larger than 2019 levels, compared to a previous estimate that it was 1.2% smaller.
The revision means the UK’s economy is now believed to have grown by 8.5% during 2021, compared to the previous estimate of 7.6%, the ONS said.
The ONS did not change its estimate that GDP shrank by 5.8% in 2020.
The news was welcomed by the Chancellor, who was a backbench MP in 2021.
Inflation has eased back to 6.8% from a recent eye-watering peak of 11.1% last October, but is still far from the Bank of England’s 2% target.
Prime Minister Rishi Sunak pledged to halve inflation from 10.7% back in January to around 5.3%.