UK Economy

Debate between Stephen Timms and Bim Afolami

Monday 19th February 2024 Commons Chamber

[Bim Afolami]

My right hon. Friend is correct that things are starting to get better for many people across the country, including small businesses. We have more than halved inflation, which is now down below 4%; we think that in the coming months it will go to 2%, which is the target. Of course, once it hits that target, we hope that interest rates will also start coming down, which will make a big difference to ordinary people up and down the country.

[Sir Stephen Timms (East Ham) (Lab)]

I applaud the Minister’s willingness to take on this unenviable assignment, unlike his right hon. Friends. The international context that he refers to is that Japan and the UK are the only G7 countries in recession. Inflation in the UK, which he has referred to, is the highest in the whole G7. Why is the UK economy doing so much worse than comparable economies elsewhere?

[Bim Afolami]

The right hon. Gentleman makes an interesting point, but I would say that our economy entered difficult times at a different point in the cycle from certain other economies. To fully assess the performance of all economies, we have to wait for the end of this whole period, so I would not prejudge exactly at this stage. I simply say that the difficulties we are facing have affected every single economy, although the nature of different economies means that they are affected at different times. We are putting in place comprehensive growth measures and comprehensive measures to bring inflation down. I also note that UK interest rates are roughly middle-of-the-pack compared with other countries of comparable size. We will keep all this under review and, at the next fiscal event, will take further measures to increase our potential growth rate over the long term.