Rishi Sunak’s government has faced scrutiny after confirmation came on Thursday that the UK slipped into a technical recession late last year.
Figures from the ONS showed UK GDP contracted 0.3% over the final three months of 2023, following a 0.1% fall in the previous quarter, with TaxPayers’ Alliance chief executive John O’Connell laying the blame on the government.
He said: “The evidence is clear that the government has been suffocating the economy with excessive regulation, dangerous levels of debt and a record high tax burden.”
Commentators argued that GDP per capita, which declined 0.7% over the course of the year, was a more important metric though, given implications on living standards.
“If ministers hope to restore growth in the long term they need to rein in spending and provide the tax cuts that individuals, families and businesses desperately need,” O’Connell added.
Chancellor Jeremy Hunt said the UK’s lack of growth was unsurprising though, as he stuck to his guns on the government’s aim to cut inflation.
“High inflation is the single biggest barrier to growth which is why halving it has been our top priority,” he commented.
“While interest rates are high - so the Bank of England can bring inflation down - low growth is not a surprise.”
Hunt added that there were signs of the UK economy “turning a corner,” with data earlier this week showing wage increases above inflation and low unemployment.
Wednesday’s inflation reading of 4% for January, which was lower than market expectations, also raised hopes of base rate cuts in the coming months.
However, Hunt suggested imminent changes were unlikely.
“Although times are still tough for many families, we must stick to the plan,” he said.