Britain's Chancellor, Jeremy Hunt, called for optimism Friday as he unveiled a four-point plan to turn around the country's economic fortunes. Photo courtesy of the U.K. Parliamentary Recording Unit/EPA-EFE
LONDON, Jan. 27 (UPI) -- British Chancellor Jeremy Hunt laid out his vision Friday to restore stability to an economy reeling from hammer blows dealt by the pandemic, the financial crisis and the international energy crisis sparked by war in Ukraine.
Setting out a four-point plan, Hunt stressed that tackling high inflation was his No. 1 priority, taking precedence over tax cuts, and urged people to reject the creeping defeatism in the country.
"Declinism about Britain is just wrong. It has always been wrong in the past -- and it is wrong today," said Hunt.
"Some of the gloom is based on statistics that do not reflect the whole picture."
The latest figures show Britain has the highest inflation coupled with the lowest growth seen in decades. The inflation rate for last year was 9.2%, while the economy shrank by 0.3% in the three months to November, the latest figures from the Office for National Statistics show.
The Bank of England hiked its base interest rate -- which now stand at 3.5% -- nine times last year in a bid to halt rocketing inflation.
But Hunt said Britain was doing as well as its neighbors, pointing out that since 2010 Britain's economic growth had outperformed France, Japan and Italy.
Since 2016, British growth had kept pace with that of Germany, he added.
"Yes, we have not yet returned to pre-pandemic employment or output levels. But an economy that contracted 20% in a pandemic still has nearly the lowest unemployment for half a century," Hunt said.
The other pillars of his blueprint, aimed at making Britain the most prosperous country in Europe, are enterprise, education and everywhere. The latter refers to his plan to ensure the whole country reaps the benefits of economic growth, not just the prosperous south.
Hunt said the Conservative Party understood better than others the importance of low taxes in creating incentives and "fostering the animal spirits" that spur economic growth.
"But another Conservative insight is that risk-taking by individuals and businesses can only happen when governments provide economic and financial stability.
"So the best tax cut right now is a cut in inflation."
Hunt, a back-bench member of parliament, was appointed in October with the express job of rescuing the country from an economic crisis sparked by outgoing prime minister Liz Truss and her chancellor, Kwase Kwarteng. Truss and Kwarteng's economic plan, centered on huge tax cuts for business and the wealthy, saw government borrowing costs rocket and a run on the pound.
Hunt's reversal of fortunes came just three months after having been roundly defeated in a contest for leadership of the Conservative Party, sparked by the resignation of Boris Johnson. Truss was elected party leader and became prime minister in September, only to be forced to resign after six weeks in office.