HUNT'S DASH FOR GROWTH BUDGET TO BEAT SLUMP

CHANCELLOR RAISES HOPES UK WILL AVOID RECESSION AS INFLATION SET TO PLUNGE

- Nicholas Cecil and David Bond

JEREMY HUNT made a dash for growth today as he hailed a boost to Britain’s short-term economic outlook, putting the country on course to avoid a recession this year.

In his first Budget, the Chancellor also trumpeted an expected sharp fall in inflation, from just over 10 per cent to around three per cent by the end of the year. He lifted some of the economic gloom as he unleashed a carrot-and-stick drive to increase Britain’s workforce and business investment to ramp-up economic growth. “Today we face the future with extraordinary potential,” he said.

GDP, the nation’s output, was still expected to fall, possibly by around 0.2 per cent this year, but far less than the drop of 1.4 per cent predicted in the autumn, and a big enough improvement to avoid a recession — defined as two consecutive quarters of negative growth.

Higher tax receipts and lower spending on some schemes such as the energy price guarantee, after the sharp fall in the cost of gas, have boosted the Treasury’s coffers. The economy is then set to grow by nearly two per cent in 2024, a figure which will raise hopes among Tory MPs of significant pre-election tax cuts, which some of them are demanding now. However, forecasts for the two following years were expected to be down. In a further sign of possible tight public finances in coming years, the Chancellor’s fiscal headroom is set to fall from just over £9 billion to about £6 billion towards the end of the forecasting period.