The head of the UK Treasury acknowledged the country’s economy is plunging into recession

The contraction of the UK economy next year will be 1.4% against the backdrop of a recession that began in the country, transmits Bloomberg referring to the speech of the Minister of Finance of the Kingdom Jeremy Hunt in the House of Commons of the British Parliament.

The Kingdom’s Office of Budgetary Responsibility, Hunt notes, predicts the economy will shrink by 1.4% next year, below the previous official growth forecast of 1.8%. He also lowered his forecast for 2024, blaming it on “global headwinds”, primarily the rise in energy prices, which was caused by “Russia’s military actions in Ukraine.”

The minister also said that inflation by the end of this year should be 9.1%, in 2023 – 7.4%. The unemployment rate should rise to 4.9% in 2023 from the current 3.6%.

“We are making difficult decisions to deal with inflation and lower mortgage rates. But our plan also leads to a slight economic downturn, lower energy bills, higher long-term growth, and a stronger health and education system,” he said.

The energy crisis in Europe began in 2021 against the backdrop of forcing the energy transition to green energy sources, the low level of occupancy of European UGSFs and a drop in wind power generation due to calm weather.

In 2022, the situation worsened due to interruptions in energy supplies from Russia after the start of a special operation in Ukraine and the subsequent anti-Russian sanctions. The price of gas in early March set an absolute record, when TTF futures quotes approached $3,900 per 1,000 cubic meters. m. Subsequently, gas prices in Europe declined, but are still a multiple of the pre-pandemic level.

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