Chancellor: UK Economy Experiencing a 'Sprain, Not a Broken Leg
Chancellor Jeremy Hunt characterized the UK economy as experiencing a setback akin to a sprain rather than a severe condition like a broken leg.
He acknowledged that Brexit and the 1COVID1-19 pandemic have contributed to significant government instability but remained optimistic about the potential for growth and productivity enhancements following measures proposed in the recent autumn statement.
During the Resolution Foundation conference, where a report indicating the UK's relative economic decline and pressing challenges was released, Hunt maintained a tone of confidence.
The UK, he noted, has witnessed slower productivity growth than other developed nations, resulting in stagnant wages and lower living standards compared to countries like France.
Additionally, the report highlighted that UK household incomes may not recover to pre-crisis levels until at least 2027 and pointed out the country's high income inequality.
Hunt argued that while the UK has areas that require improvement, there's also excellence to recognize, particularly in sectors like artificial intelligence, where he referenced a recent compliment from Elon Musk on London as a leading AI hub.
Addressing political turnover, the Chancellor cited Brexit and the pandemic as the causes for recent upheavals but hoped for more stability in government. He emphasized the benefits of ministers remaining in their roles for extended periods.
Lastly, Hunt endorsed the proposal for making tax breaks for businesses, including full expensing, a permanent feature, suggesting that this is part of a broader strategy aimed at fostering productivity and, consequently, improving living standards. He expressed his willingness to continue introducing significant new policies to bolster the economy.