March 30, 2023

Dubai Week

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British economy to avoid recession in 2023

The government’s cost-of-living measures will total £94 billion over two years

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British Finance Minister Jeremy Hunt confirmed his country will avoid “recession this year” contrary to earlier expectations when presenting the budget to Parliament.

Hunt said the economy would shrink 0.2% this year and inflation would ease from 10.7% to 2.9%, compared with earlier expectations of a 1.4% contraction.

Hunt announced that the cost of living adopted by the Conservative government would be £94 billion over the current and next years.

On the other hand, the British Treasury renewed the energy tariff ceiling guarantee for another three months at current levels, aiming to ease the pressure on households.

The Treasury said the cap on energy bills would remain at £2,500, but prices are still double what they were two years ago.

In April, the government took action to prevent a £500 increase in consumers’ annual energy costs.

However, Goldman Sachs said the move would help reduce inflation in Britain to 1.8% by the end of the year.

In an interview with Al-Arabiya, economist Ali Medwali said the Treasury Department’s estimates of growth in the British economy are “optimistic” as the market expects a contraction in the 0.5% to 1% range this year.

The main reason for the “less optimistic” expectations is that personal consumption is still suffering from high inflation, and that investments will not rise significantly after tax increases on large, highly profitable corporations. $250,000.

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