UK Chancellor of the Exchequer Jeremy Hunt warns that inflation is still far too high
- Britain’s Chancellor of the Exchequer Jeremy Hunt signaled that the country’s inflation is still too high.
- The latest official data showed that the UK economy grew by 0.1% in the first quarter.
- The Covid-19 pandemic has led to severe global logistics and production bottlenecks.
- While sanctions following Russia’s full-scale invasion of Ukraine last February have deprived Western consumers of Moscow’s fuel supplies.
Jeremy Hunt gave a speech on Friday to set out plans for economic growth in Britain
Bloomberg / Contributor / Getty Images
LONDON – Britain’s Chancellor of the Exchequer Jeremy Hunt signaled the country’s inflation remains too high, a day after the Bank of England adopted its 12th consecutive interest rate hike in a bid to combat stubbornly high household prices.
“I think we are aware that there is still a long way to go. We still have inflation that is too high, growth is still not as high as we would like,” he told CNBC’s Martin Soong on Friday, hours after the last official data showed that the UK economy grew by 0.1% in the first quarter.
“I think the UK is back and it’s numbers that nobody would have predicted even three months ago. These are much higher growth forecasts,” he noted of the first-quarter print, but still flagged ongoing concerns over labor supply, productivity rates and how to grow long-term growth.
He defended that Britain’s economic performance has been affected by macroeconomic concerns, citing a “once-in-a-century pandemic and an energy price shock that is probably the biggest since the 1970s.”
The Covid-19 pandemic has led to severe global logistics and manufacturing bottlenecks, while sanctions following Russia’s full-scale invasion of Ukraine last February have deprived Western consumers of Moscow’s fuel supplies.
Hunt underlined his support for the Bank of England’s decision on Thursday to raise interest rates by a further 25 basis points despite the latest GDP results, arguing that the move will counter the “fundamental instability” triggered by high inflation.
The subsequent spring collapse of several international banks, including Europe’s Credit Suisse, had raised questions about whether central banks would begin easing policy by quickly raising interest rates.
“I think we all think, certainly we in the UK think, that the most important thing we need to do is to focus on getting inflation down,” Hunt stressed. “When inflation is down and you have stability, you can start to get growth up.”
