UK’s Jeremy Hunt willing to risk recession to bring inflation down – POLITICO

LONDON – Jeremy Hunt is ready to accept a recession if rising interest rates help curb inflation, the British Chancellor has announced.

In an interview with Sky News on Friday, Hunt insisted that “the only path to sustainable growth” is to drive down the cost of essential goods.

Asked if he was comfortable with further interest rate hikes even if they risked pushing the UK into recession, Hunt said: “Yes, because at the end of the day, inflation is a source of instability”.

“If we want to have prosperity, grow the economy, reduce the risk of recession, we have to support the Bank of England in the tough decisions it makes,” Hunt added.

Under British monetary policy, the power to raise interest rates rests with the independent central bank. As part of its bid to tackle stubbornly high inflation, the bank raised its key rate to the highest level since the middle of the global financial crisis in 2008.

Despite recently falling below single digits for the first time in months, the UK’s consumer price index inflation rate stands at 8.7%. Food prices in the UK also continue to rise at the fastest rate in almost 45 years.

One of British Prime Minister Rishi Sunak’s key pledges is to halve the rate of inflation, which stood at 10.1% when he made the pledge in January.

The opposition Labor Party hit back at Hunt’s suggestion that recession could be the price to pay for lowering inflation.

“No government should ever just see the recession,” Shadow Trade Secretary Nick Thomas-Symonds told Sky News. “Frankly, this government has no credible plan to revive growth.”