Chancellor Jeremy Hunt expresses support for raising interest rates to address inflation, despite the risk of recession hurting UK GDP. (Image: Reuters)
Hunt highlights the need to control inflation through an increase in interest rates, even if this threatens a recession.
UK Chancellor of the Exchequer Jeremy Hunt backed interest rate rises to calm rising inflation, even though it risks pushing the UK into recession.
Talking to UK based media outlets sky News And this WireHunt insisted that the high prices behind the cost of living crisis must be brought down to pave the way for sustainable growth.
as reported by WireMarket predictions in the UK suggest that to address inflation, the Bank of England could raise interest rates this year from the current rate of 4.5% to 5.5%.
Inflation in April stood at 8.7%, which though lower than the previous 10.1%, is still high. Core inflation rose to its highest level since 1992, along with a sharp rise in food prices.
Hunt told sky News news That priority should be given to steps taken to slow rising prices, even if rate hikes hurt UK gross domestic product (GDP).
Hunt said he is comfortable with the Bank of England taking steps to control inflation, even if it triggers a recession.
“Finally inflation is a source of instability. If we want prosperity, grow the economy, reduce the risk of recession, we have to support the Bank of England in the difficult decisions they make. sky News And this Wire,
He said that as Chancellor of the Exchequer he must ensure that the decisions he makes to “balance the books”, however difficult they are, must demonstrate to “the markets, the world” that Britain is the country to be One who “pays his own way”. He said all these things would show that “the monetary policy of the Bank of England (and) the fiscal policy by the Chancellor are aligned”.
UK Prime Minister Rishi Sunak promised to halve inflation in January this year, when the inflation rate stood at 10.1%.
Bank of England Governor Andrew Bailey said the Sunak-led government was likely to meet the target despite rising prices.
“It is not a tradeoff between tackling inflation and recession. Ultimately, the only way to sustainable growth is to bring down inflation,” Hunt said. sky News news,
The International Monetary Fund (IMF) has raised its growth forecast for the UK economy, predicting a modest expansion of 0.4%. This positive outlook suggests that Britain is expected to avoid recession.
