Wages are up, mortgage rates are down, and unemployment is low...signs the economy is 'turning the corner

JEREMY Hunt has promised economic growth will be the top priority in next month's spring Budget after the UK slipped into recession.

- Sam Lister

The Chancellor said taxes would be cut only in a "responsible" way after figures showed the economy shrank 0.3% at the end of 2023.

Mr Hunt insisted there was "light at the end of the tunnel" - with the data showing slight growth across the whole year.

He said: "When the Prime Minister made his commitment [to grow the economy in January last year] he was very clear that tackling inflation had to come first...If we stick to our guns now, we can actually see light at the end of the tunnel." Mr Hunt also revealed he is considering cutting public spending plans if he does not have as much room for tax cuts in the Budget as hoped. He pointed out that economies with "lighter taxes" do "tend to grow faster" than those with high burdens.

"But," he added, "I would only cut taxes in a way that was responsible and I certainly wouldn't do anything that fuelled inflation just when we are starting to have some success in bringing down inflation." Inflation and high interest rates were behind the fall in growth, he said, but the economy was "turning a corner".

"While interest rates are high - so the Bank of England can bring inflation down - low growth is not a surprise.