LONDON (Reuters) -British finance minister Jeremy Hunt said on Saturday inflation was on track to halve by the end of 2023, vowing to focus on the goal as he laid out his priorities ahead of the reopening of parliament after the summer break.
Britain’s inflation rate is forecast to fall to about 5% by the end of the year – half January’s level – and meeting the target would mean one of the five key pledges Prime Minister Rishi Sunak made to voters for 2023 would be met.
Hunt said in a statement pressure on household budgets would start to ease as inflation cools. He also highlighted his efforts to increase productivity in the public sector to boost growth.
Hunt and Sunak are keen for voters to start feeling more optimistic about the economy as the country heads for an election expected next year, with the opposition Labour Party currently far ahead in the polls.
“We are on track to halve inflation this year and by sticking to our plan we will ease the pressure on families and businesses alike,” Hunt said, ahead of lawmakers returning to parliament on Monday.
For July, Britain’s annual consumer price inflation rate cooled to 6.8% – still the highest rate among the Group of Seven economies.
“I do think we may see a blip in inflation in September but after that the Bank of England is saying it will fall down to around 5%,” Hunt told the BBC on Sunday.
The BoE has forecast inflation falling to 4.9% by the end of this year – a faster decline than it had predicted in May.
Hunt’s continued focus on inflation will disappoint some lawmakers from within the ruling Conservative Party who have called for tax cuts before the election, angry that British tax revenues are the highest as a share of the economy since the 1940s.
Revised economic data published on Friday provided a welcome boost to the government as it showed the economy recovered faster from the pandemic than previously thought.
(Reporting by Sarah Young; Additional reporting by Sachin RavikumarEditing by Helen Popper and David Evans)