UK Finance Minister Jeremy Hunt signaled the nation’s inflation remains too high, a day after the Bank of England agreed its 12th consecutive interest rate hike in a bid to combat stubbornly high household prices.
“I think we are aware there is still a long way to go. We still have inflation that is too high, growth is still not as high as we would like it to be,” he told CNBC on Friday, hours after the latest official data showed the UK economy eked out 0.1% growth in the first quarter, CNBC said.
“I think the UK is back and those are numbers that no one would have predicted even three months ago. These are much higher growth projections,” he noted of the first-quarter print, nevertheless flagging ongoing concerns over labor supply, productivity rates and how to increase long-term growth.
He defended that UK economic performance has been impacted by macro-economic concerns, citing a “once-in-a-century pandemic and an energy price shock that is probably the biggest since the 1970s.”
The Covid-19 pandemic has led to severe global logistical and production bottlenecks, while sanctions following Russia’s full-scale invasion of Ukraine in February last year have deprived Western consumers of Moscow’s fuel supplies.
High inflation has loomed large and scantly abated over economic prospects, with waves of workers across the transport, health and education sectors taking to the streets to demand pay increases to meet rising household expenses in recent months. Hunt said negotiations to resolve strikes were under way, but played down pay increases as a cure-all solution.
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