Spring Statement 2022 : Sunak cuts fuel duty as UK slashes growth forecast British Chancellor of the Exchequer Rishi Sunak leaves Downing Street on the day of the Spring Statement, in London, Britain, on March 23, 2022. (REUTERS/Peter Cziborra)
BRITAIN‘S economy will grow more slowly this year than previously predicted and inflation will be much higher, chancellor of exchequer Rishi Sunak said as he gave a budget update which included measures to ease a cost-of-living squeeze.
Sunak, announcing forecasts drawn up by the Office for Budget Responsibility (OBR), said on Wednesday (23) that the economy was likely to grow by 3.8 per cent in 2022, a sharp slowdown from a forecast of six per cent made in October.
Inflation, as measured by the consumer price index, is now seen at 7.4 per cent in 2022, compared with October’s forecast of 4 per cent.
Sunak is under pressure to offer more help to Britons who are facing their worst cost-of-living squeeze in at least 30 years and he announced a cut to fuel duty of 5 pence per litre starting later on Wednesday and lasting until March next year.
Earlier, data showed Britain’s consumer price inflation hit a 30-year high of 6.2 per cent last month, driven by soaring costs for energy and food, which poorer households especially may find hard to cut back on.
The International Monetary Fund estimates British gross domestic product will grow by 4.7 per cent in 2022, the fastest among Group of Seven nations. The British economy suffered a Covid-19 slump of more than 9 per cent in 2020 and grew by more than seven per cent in 2021.
The OBR forecast that gross domestic product would grow by 1.8 per cent, 2.1 per cent and 1.8 per cent in 2023, 2024 and 2025, Sunak said.
In October, the OBR had forecast growth of 2.1 per cent, 1.3 per cent and 1.6 per cent over the next three years.