Boris vows 'cost of living crisis will get better' despite expert's dire economic forecast

8 June 2022, 22:35 | Updated: 9 June 2022, 00:52

The Prime Minister has vowed the cost of living crisis "will get better"
The Prime Minister has vowed the cost of living crisis "will get better". Picture: Alamy

By Megan Hinton

The Prime Minister has vowed the cost of living crisis "will get better" but warned "it's not going to be quick or easy" after a dire forecast that only Russia will have worse growth than UK next year.

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Boris Johnson is set to tell the British public in a speech on Thursday, that he is firmly on their side as he "reaffirms his commitment to supporting them throughout this challenging period".

An announcement on further reforms is expected in the coming weeks about Government plans to "make people’s lives easier, boost UK productivity and increase growth".

Mr Johnson's speech in Lancashire comes after the Organisation for Economic Co-operation and Development predicted on Wednesday that economic growth in the UK will grind to a halt in 2023.

The worrying forecast puts only Russia, who are facing a range of sanctions from western countries, ahead of the UK among the largest G20 economies.

The international organisation projects that UK GDP will grow by 3.64% this year. In December it had forecast 4.75% growth.

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Inflation will peak at over 10% this year and decline to 4.7% by the end of next year.

It comes alongside a global slowdown which is due in large part to the war in Ukraine.

In response to the OECD report, the Treasury told the Financial Times: "We recognise many people will be concerned by these forecasts," but added "we can’t insulate the UK from global pressures entirely . . . [but] we are supporting people with the cost of living."

Cost-of-living crisis represents 'years of government failure'

The fallout from the pandemic and the shock of Putin’s aggression in Ukraine has caused global pressure on prices, leaving Brits facing rising costs in their daily lives.

In a speech, the Prime Minister will say: "We have the tools we need to get on top of rising prices. The global headwinds are strong. But our engines are stronger.

"And, while it’s not going to be quick or easy, you can be confident that things will get better, that we will emerge from this a strong country with a healthy economy."

He will add: "Over the next few weeks, the government will be setting out reforms to help people cut costs in every area of household expenditure, from food to energy to childcare to transport and housing.

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"As we continue to deal with the covid aftershocks, and the inflationary impact of the war in Ukraine, our strategy is clear.

"We will continue to use our fiscal firepower to help the country through tough times – and concentrating our help where we should, on those who need it most.

"We will continue with the agenda on which this government was elected, to unite and level up across the country, building the productivity of the UK with generational investments in infrastructure, skills and technology.

"We will continue to support the NHS and to clear the covid backlogs, and to fund all other vital public services.

"At the same time we will use this moment to accelerate the reforming mission of the government, to cut the costs that government imposes on businesses and people up and down the country.

"With more affordable energy, childcare, transport, and housing we will protect households, boost productivity and above all increase the rate of growth of the UK.”

Read more: 'They're still eating McDonald's!': Caller fed up with people 'whining' over cost of living crisis

Transport Sec warns over Russian impact on cost of living

Mr Johnson is also expected to announce new measures that will help first-time-buyers to get onto the property ladder.

The government say they are "committed to reversing declining home ownership rates", which have seen the proportion of 25–34-year-olds who own their own home fall from 55% to 34% between 1996 and 2016.

With a Government spokespersons saying: "Currently, too many people are spending huge sums of money in the private rental market when that money could be better spent on investing in their futures, in the form of mortgage payments on their own home.

"The Prime Minister will confirm his ambition to unlock the opportunity of home ownership for more people through helping those in a position to buy, to access the mortgage finance they need, ensuring people are incentivised to save for a deposit no matter their financial situation, and improving the supply of housing across the country."