12 February 2024 , 10:15
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Rishi Sunak has insisted everything is fine despite warnings the UK could be plunged into recession later this week.
The PM faces a tricky few days amid concerns inflation could go up on Wednesday, before gloomy economic growth figures are announced on Thursday. These could confirm that the UK entered a recession at the end of last year.
But Mr Sunak yesterday claimed the economy "has turned a corner" despite the prospect of a technical recession. Speaking to reporters in Harrogate, the PM acknowledged that recent years had been "undoubtedly difficult", but added: "At the start of this year I really believe the economy has turned a corner and we are heading in the right direction. You can see inflation has come down from 11% to 4%, mortgage rates are starting to come down, wages have been rising consistently now."
Mr Sunak added that the cut in national insurance at the start of the year "shows that the plan is working", but declined to say whether entering a technical recession would affect the possibility of further tax cuts in the Budget next month.
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The PM has promised to grow the economy, but if Office for National Statistics' (ONS) figures show gross domestic product went down in the last three months of last year, it means the UK instead went into recession. This happens after two consecutive quarters of negative growth are recorded.
This morning Security Minister Tom Tugendhat said it is "no great secret" that the Government is going through a "really challenging time". Quizzed about the prospect of a recession he told ITV's Good Morning Britain: "The reality is this is a really challenging time for the Government. There's no great secret in that. But what is also true is that there's an awful lot that we've got to do to make sure we're looking after the British people.
"The whole point about government is to take difficult decisions and to make sure we're delivering, and that's why the priorities the Prime Minister set out, including bringing down inflation and supporting growth, are so important."
Chief Secretary to the Treasury Laura Trott told the Sunday Times: "There will be bumps in the road and on Wednesday we can expect inflation to slightly increase when data for January is published."