Last week economic news felt like further evidence that we have turned a corner. The latest GDP figures showed that the UK economy growing by 0.6% in the first three months of the year. This welcome boost adds to the good news of wages growing faster than inflation, falling energy prices and tax cuts worth £900 to the average worker. It has been a difficult few years, and whilst there is more to do, we are seeing steady progress.
By sticking with the plan to grow the economy, our Conservative Government will have more money to invest in public services as well as lowering taxes for working people.
In October 2022, the Bank of England were expecting the longest recession in 100 years, and the Office for Budget Responsibility said the economy was going to shrink by 1.4%. Labour gleefully seized upon these predictions and spent the last two years talking our economy down.
There was two successive quarters of economic contraction in the second half of 2023, which is the technical definition of a recession, a very mild recession by historical standards. Overall, our economy still grew last year, is growing more strongly this year, and is forecast to grow faster than France, Germany, Italy, and Japan over the next six years.
Our economic recovery is combined with inflation falling to its lowest rate for two and a half years, with the future projections predicting it will soon fall to the Bank of England’s 2% long-term target.
When combined with wages now growing at a faster rate than prices, this means the cost of living is becoming more affordable than it was, with wages having grown in real terms for nine months in a row.
Mortgage rates are down from their peak and interest rates are predicted to start falling later this year. National Insurance has now been reduced by a third, which means those earning the average salary will receive an extra £900 per year in their pay packet. It is Conservative policy to keep reducing National Insurance whenever it is affordable to, until it is gone completely.
Councillor Duncan Crow, Leader of Crawley Borough Council Conservative Group
15th May 2024
