Rishi Sunak and Jeremy Hunt had a plan for the economy, and they have spent much of the past year telling us that the plan is working.
The problem is that this plan seemingly involves inducing an economic recession. That’s a tough sell for any government in an election year.
Politics live: ‘Rishi’s recession’ jibe from Labour
The priority was to get inflation down, they said. That would require fiscal restraint and interest rate rises from the Bank of England.
Growth would suffer. It would be painful but it would be worth it. When the economy turned a corner, the chancellor could then start cutting taxes and turbo-charging growth.
But when should this corner have been turned?
As part of his five pledges – the targets he wanted to be judged by at the end of the year – the prime minister said he wanted to “grow the economy.”
Britain’s economy eked out growth of 0.1% over the course of 2023 but, with the economy spending half the year in recession, it’s fair to say the spirit of that pledge has not been met.
There’s no doubt he wanted the economy to end the year in growth.
Just yesterday, Mr Sunak confidently announced that the UK economy had “turned a corner”. A day later it was revealed that the country was in recession.
Not only that but GDP per capita, which takes account of population size and gives a good indication of living standards, fell by 0.7% last year and has done so consistently since the middle of 2022. That’s a record.
