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Sunak insists economy ‘has turned a corner’ despite prospect UK could go into technical recession by end of the week
12 February 2024, 12:33 | Updated: 12 February 2024, 13:33
'We are investing record amounts in general'- Rishi Sunak says on economy
Rishi Sunak has insisted the UK economy has ‘turned a corner’ despite the prospect of a recession in the coming days.
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The Prime Minister is set for one of the most challenging weeks of his premiership yet as he faces the possibility of recession, alongside a double by-election and the arrival of the Rwanda bill in the House of Lords this week.
On Thursday, data from the ONS will reveal whether the UK entered a technical recession in the final quarter of last year.
Despite the potentially gloomy economic figures, Mr Sunak has insisted the UK economy is heading in the “right direction”.
During a visit to Harrogate on Monday, Mr Sunak told LBC's reporter: “At the start of this year I really believe the economy has turned a corner and we are heading in the right direction.
“You can see inflation has come down from 11% to 4%, mortgage rates are starting to come down, wages have been rising consistently now."
Mr Sunak has repeatedly promised to grow the economy, but data published by the ONS late last year revealed the economy is on the brink of recession after GDP fell by 0.1% between July and September.
A recession is defined as two consecutive quarters of negative gross domestic product (GDP).
If Thursday’s figures show another contraction, it means the UK will have entered a technical recession.
The figures will be published following Wednesday's inflation figures, with concerns it could go up before Mr Sunak finds out if the UK has entered a recession.
Chief Secretary to the Treasury Laura Trott 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.”
Mr Sunak declined to comment on whether a technical recession would impact the possibility of tax cuts in the Spring Budget next month.
Asked how he would assist smaller businesses ahead of the potential gloomy figures, Mr Sunak said: “Small businesses are the lifeblood of our economy and there’s some fantastic small businesses across Harrogate and indeed north Yorkshire. One of the things we’re keen to do is support them on business rates.
“That’s why coming into this year there will be a 75% reduction on their business rates.”
It comes as the Government’s Rwanda bill heads to the House of Lords today, where it is expected to face various changes.
A report published by parliament’s Joint Committee on Human Rights on Monday said “no amendments can salvage” the legislation and risks “untold damage” to the UK’s reputation.
The bill passed the first parliamentary stage in the House of Commons last month despite threats of a Tory rebellion.
Meanwhile, a double by-election is scheduled to take place in Kingswood and Wellingborough on Thursday, previously considered two safe Tory seats.
The by-elections were triggered after MP Peter Bone was ousted from his seat following a report into sexual misconduct and Chris Skidmore resigned over new legislation which will allow greater fossil fuel extraction in the North Sea.