London Daily

Focus on the big picture.
Thursday, Sep 24, 2026

Sunak was already under pressure from the cost of living crisis - the GDP figures might force him to make a major intervention

Sunak was already under pressure from the cost of living crisis - the GDP figures might force him to make a major intervention

With inflation forecast to exceed 10%, the highest it's been in 40 years, the Bank of England has already warned it will cause the economy to shrink. Recession is entirely possible.

Be in no doubt, today's GDP figures are bad news indeed.

Bad news as they show the economy is shrinking sooner than expected, down 0.1% in March.

But bad news too, in terms of what it heralds for the rest of the year. All the signs and predictions were already that the worst is set to come later this year. The question now is: How much worse?

And at the centre of it all is a chancellor under immense pressure to act, not least from within his own party.

Rishi Sunak's challenge: to show that he is not out of touch with the struggles people are facing and that he can manage the big challenges when he no longer has a blank cheque as he did during the pandemic.

While the economy did grow slightly overall in the first quarter of the year (0.8%), the rate of growth has slowed and it's what happened in March that will be the most concerning.

A slowdown is hardly a surprise. Lasting problems in supply chains coupled with high energy costs are squeezing the production of manufacturers. But there is another crucial reason.

As inflation soars to new 30-year highs, there is a fear that consumers will begin to cut their cloth, and hold back from the spending so needed to shore up the post-pandemic recovery.

Indeed, official measures show that retail sales fell by 1.4% between February and March, while Open Table data shows that the number of seated diners dropped by three percentage points.

Recession is entirely possible


People may soon not have the money to spend, and that's a huge problem.

With inflation forecast to exceed 10%, the highest it's been in 40 years, the Bank of England has already warned it will cause the economy to shrink. Recession is entirely possible.

The chancellor knows this and many are asking why he's not doing more to help.

Interventions thus far have been judged by some as "simply not enough".

There was the Spring Statement that announced a cut in fuel duty and a rise to the threshold at which people start paying national insurance. There was also a £200 rebate offered on energy bills and an additional £150 through the council tax system for some households.

PM may want to see more action


But Mr Sunak is seemingly resisting another major tax or spending intervention in the immediacy.

Among those who want to see more action now, may well be the prime minister. He has reportedly been saying as much to MPs this week.

But the Treasury has denied there will be an emergency budget and the chancellor would not be drawn on when or if further tax cuts will come.

"We've done a lot already," he said.

"But I've always said I stand ready to do more as we learn more about the situation.

"And on energy prices in particular, the price cap protects people for some months to come, but I've said when we have a clearer picture about what happens with energy bills, we stand ready and I stand ready to support people."

'Standing ready' is not enough


There are many, of course, who will argue that "standing ready" is not enough when people are going hungry now.

Measures such as energy rebates take time to implement and need to be in place before the next price cap rise in October. Many experts, including the chief executive of Scottish Power, have urged further pre-emptive action.

There are of course reasons the chancellor may have for waiting and assessing. The public finances are still extremely strained following the pandemic and this is a fast-moving crisis.

But Mr Sunak was already a man under pressure; the disclosure of his wife's nom-domiciled tax status, his fine for breaking lockdown rules and critiques that he is out of touch with ordinary people to name just a few of his problems.

Today's GDP numbers may bring that pressure to bear - as the crisis worsens for millions around the country he may not be able to resist more major intervention much longer.

Newsletter

Related Articles

0:00
0:00
Close
Royal Navy Commandos Complete Maritime Operations Training With US Navy SEALs
Vistry Profit Warning Adds to Concerns Over UK Housebuilding Conditions
UK Commits £343 Million to Major Expansion of Community Mental Health Services
Five Eyes Partners Back UK-Led Campaign Against Global Fraud Networks
UK Businesses Gain Full Access to £13 Trillion CPTPP Trading Bloc
UK Allocates Nearly £10 Billion for Council, Social and Affordable Housing
Chancellor John Healey Unveils Deregulation Drive to Accelerate UK Investment and Growth
Prime Minister Andy Burnham Sets Out Post-Brexit Foreign Policy Vision at United Nations
UK Reassesses Chagos Arrangements as Burnham Seeks New Path on Diego Garcia
Key Trends to Watch
Government’s “Buy British” Procurement Push Targets More Domestic Jobs and Industrial Capacity
Scotland Launches Four-Year Flood Resilience Programme With New Community Funding
Low-Income Renters Face Record Gap Between Housing Support and Private Rents
UK and US Test Torpedo Launch From British Undersea Drone in Defence Technology Milestone
Britain Pushes Artificial Intelligence Security Onto United Nations Security Council Agenda
Treasury Committee Defends Office for Budget Responsibility Independence Amid Fiscal Pressure
Scotland Records Eleven Per Cent Rise in Drug-Use Deaths as Cocaine and Nitazenes Drive Concern
Welsh Government Sets Four-Year Programme Around Health, Living Costs, Jobs and Housing
Study Finds Most People With High Blood Pressure in England Remain Undiagnosed
Britain Plans First National Workplace Health System to Tackle Economic Inactivity
England to Introduce Vocational GCSEs in Major Secondary Education Reform
UK Elevates Climate and Nature Risks to National Security Priority
Andy Burnham and Donald Trump Put Trade at Centre of First Major Bilateral Meeting
Andy Burnham and Ursula von der Leyen Push Ahead With Closer UK-European Union Economic Ties
UK Government Borrowing Jumps to Eighteen Point Three Billion Pounds Ahead of October Budget
Piddington Residents Back Symbolic Independence Vote Over Asylum Accommodation Plan
Reform UK Names Helen Jenner as New Leader in Wales
England Expands Devolution of Transport, Skills and Economic Development Powers
Liberal Democrats Call for Temporary Fuel Duty Cut to Ease Cost-of-Living Pressure
UK Farmers Warn Drought Has Caused Crop Failures and Reduced Harvests
UK Fixed Mortgage Rates Approach 6% as Lenders Raise Borrowing Costs
YouGov Poll Puts Labour at 23% With Conservatives and Reform UK on 21%
Badenoch Presses Burnham to Increase Defence Spending and Cut Welfare Costs
UK Military Figures Warn of Growing Threats to Undersea Infrastructure and National Readiness
BP Moves Ahead With Sale of UK North Sea Oil and Gas Business
UK and ASEAN Endorse New Framework for Trade and Economic Cooperation
UK Consumer Confidence Falls to Three-Year Low as Borrowing Costs and Job Concerns Rise
UK Inflation Rises to 3.1% as Motor Fuel Costs Push Prices Higher
Bank of England Sets Multi-Year Plan to Wind Down Quantitative Easing Holdings
UK Borrowing Rises to £18.3 Billion in August Ahead of October Budget
Michelin Guide Faces Industry Questions Over Restaurant Inspection Coverage
English Woodlands Face Renewed Weather Stress From Dry Conditions and Strong Winds
Research Finds Extensive Alcohol, Gambling and Unhealthy Food Branding During 2026 World Cup
Five Charged After Newborn Baby Dies From Stab Wounds in Sheffield
BT Could Reap £2 Billion From Recycling Copper as Full-Fibre Network Expands
FCA Urges Young Adults to Trace £1.5 Billion in Unclaimed Child Trust Funds
Reform UK Names Helen Jenner as New Leader in Wales After Dan Thomas Steps Down
Resolution Foundation Calls for Broad-Based Tax Rises to Fund Higher UK Defence Spending
Ed Davey Calls for Global Treaty to Halt Development of Super-Intelligent AI
Scotland Consults on Legal Price Caps for Essential Foods
×