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March 17, 2023
Jeremy Hunt said that the British Economy is heading to the correct phase and will avoid a recession this year. This statement also proves the doubters wrong because many predict the UK economy will be in a stage full of threats.
Jeremy Hunt, UK Chancellor, said that the government's plans for the Economy were going well. And he said that this is also good for budget growth. And the most recent data shows that it is highly likely that the UK will avoid a recession despite previous predictions.
Meanwhile, the forecaster said they will drop the expectation lower because disposable income per person is still tumbling at 5.7% in 2-year trading in 2022-23 and 2023-24, which is feared if this is the highest figure in decades.
"They see their tax burden at its highest level for 70 years and know that the government is working to lower inflation. The main concern is because of the working people who earn less and enjoy less, said Labor Leader Sir Keir Starmer in discussing inflation.
With that statement, Chancellor UK plans to bring charges for repayment meters to be on par with direct debit charges. They will also set specific duties and maintain stricter ones. All the hope is to minimize the chances of a recession.
Mr. Hunt also went further on these calculations and calculations by saying that this would be enhanced credit for small and medium businesses. The widely reported plan regarding benefit entitlement is also used to find support for economic movements.
The concern still leads to predictions that the UK economy will shrink by 0.2% this year. This contraction of the Economy shows a budget statement related to economic priorities. So this will also help avoid recession.
The Office for Budget Responsibility (OBR) prediction shows that the government's growth plans have worked well. So that the inflation rate is considered to decrease by 2.9% by the end of the year, but the government's focus remains on boosting business investment again.
There is also recently released news regarding the fate of economic developments where investors put a 40% chance on the Bank of England, which will pause its run of interest rate increases.
Interest rate futures show the likelihood of no change in bank rates, which is around 10%. Expectations from the Federal Reserve that it will hike its interest rate this month are being widely discussed because of the recently collapsed Silicon Valley Bank.
This makes it less likely that the Fed will increase interest rates, which is also good news for the UK economy. However, from all these movements, the UK economy will take more than a year to recover to the pre-pandemic level.
It is mainly because of Jeremy Hunt's effort to boost growth. And loosening of the purse strings in the next five years will keep the UK economy from recession. In the first quarter of 2023, the UK economy is projected to shrink by 0.4%.
Meanwhile, CPI inflation is expected to fall by around 2.9% by the end of the year, so the forecast of recession in the first half of the year is directly related to the broad economic outlook of the Bank of England.
However, this was exacerbated by extra government spending, falling inflation, and lower-than-expected interest rates. Economists say that the UK still needs further action to escape the economic problems to reach the BoE's 2% target in early 2028.
The UK economy still depends on the decisions of the Federal Reserve. It was stated that there could be a possibility of increased growth this month, but the Fed made this not wholly confident. But what is certain is that the UK economy will avoid the recession in 2023.
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