Home Business News UK could hit a recession as inflation is set to rise

UK could hit a recession as inflation is set to rise

by Amy Johnson LLB Finance Reporter
12th Feb 24 8:32 am

The Office for National Statistics (ONS) has released figures that warns the Chancellor could be hit with a double blow as inflation is set to rise and the UK could be heading into a recession.

In three weeks time Jeremy Hunt will deliver the Spring Budget and the ONS figures are painting a bleak future for Hunt to be able to lower taxes.

Laura Trott, the chief secretary to the Treasury, told the Sunday Times,“There will be bumps in the road and on Wednesday we can expect inflation to slightly increase when data for January is published.”

In December the annual rate of Consumer Prices Index stood at 4% and economists have warned of another increase in January.

The rise is due to the rise in the energy price cap that came into effect in January, analysts believe that inflation will fall to 2% this year.

The ONS on Thursday will publish their first estimate for GDP growth from quarter four last year.

A Treasury source told i, “We need to make people aware that inflation may tick up this week, and we’ve also got GDP figures which could show there’s been a recession.”

A Treasury spokesman said, “We have taken decisive action to tackle inflation and reduce debt, which is why we’re beginning to see the economy turn a corner.

“While we have doubled our headroom since March, from £6.5bn to £13bn, it remains low by historical standards and can be wiped out by changing economic conditions.

“That’s why we must stick to our plan to reduce debt by growing the economy and being responsible with spending.”

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