UK Finance Minister Jeremy Hunt warns that inflation remains too high

LONDON – Britain’s finance minister Jeremy Hunt indicated that inflation in the country remains too high, a day after the Bank of England agreed to raise its 12th consecutive interest rate in a bid to combat rising household prices.

“I think we realize there’s still a long way to go. We still have very high inflation, and growth is still not as high as we would like it to be,” he told CNBC’s Martin Song on Friday, hours after the latest official data showed that The British economy grew by 0.1% in the first quarter.

“I think the UK is back and these are numbers that no one would have predicted even three months ago. These are much higher growth expectations,” he notes of the first quarter report, however he points to ongoing concerns about labor supply, productivity rates and how growth will continue to grow. the long term.

He defended that the UK’s economic performance had been affected by macroeconomic concerns, citing a “once-in-a-century pandemic and energy price shock perhaps the biggest since the 1970s”.

The Covid-19 pandemic has created severe global logistical and productivity bottlenecks, while sanctions that followed Russia’s all-out invasion of Ukraine in February last year deprived Western consumers of fuel supplies to Moscow.

Hunt reaffirmed his support for the Bank of England’s decision on Thursday to raise interest rates by another 25 basis points despite recent GDP results, arguing that the measure would counter “fundamental instability” caused by rising inflation.

The cascading spring meltdown of many international banks, including the European bank Credit Suisse, has raised questions about whether central banks will begin to ease their policies of rapidly raising interest rates.

“I think we all believe, certainly we in the UK believe, that the most important thing we need to do is focus on bringing down inflation,” Hunt emphasized. “Once inflation comes down and you have stability, you can start to ramp up growth.”