The chancellor has told Sky News there is “no room for complacency” in tackling the UK’s economic problems after official figures revealed no GDP growth in February.
But Jeremy Hunt said that while inflation was too high and growth too low, he was confident that his budget plans unveiled last month would help turn things around.
His comments came after the Office for National Statistics (ONS) reported the UK’s gross domestic product – the total value of all good and services produced in the country – flatlined at 0% in February.
This was worse than the 0.1% growth predicted by economists in a poll for Reuters.
The figures follow a rebound of 0.3% growth in January and the confirmation the UK economy avoided recession in the second half of 2022, which raised hopes for a better-than-expected financial outlook this year.
The chancellor, speaking to Sky’s Ed Conway at an International Monetary Fund (IMF) summit in Washington DC, said: “The growth numbers show there is absolutely no room for complacency. Inflation is higher than we want, growth is lower than we want.
“That’s why we’ve put in place a very clear plan in the budget to tackle the two biggest barriers to growth in the economy – businesses not being able to recruit the staff they want… [and] investment by businesses not being as high as we want. So we’ve put in measures to deal with that.”
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Why no economic growth is a problem
The chancellor added: “But when it comes to the longer-term prospects of the economy, [what] I’m hearing from my finance minister colleagues here in Washington is confidence in the resilience of the British economy – a belief that we’re on the right track.
“And when you look at the industries of the future – technology, life sciences – these are areas where the UK is very, very strong, and that is very encouraging for us in the longer-term.”
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Earlier Labour’s shadow chancellor Rachel Reeves described growth as being “on the floor” and hit out at Mr Hunt’s approach.
And David Bharier, from the British Chambers of Commerce (BCC), also expressed concerns at what he called “stubbornly low” growth.
“The government has not addressed some of the major issues holding firms back, such as the unprecedented energy price shock and record tightness in the labour market,” he added.