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BORIS Johnson has insisted the UK can avoid a recession, though the admitted that soaring inflation and energy costs still meant a “bumpy time” ahead.
The Prime Minister described the £21 billion package of measures announced by Rishi Sunak on Thursday as a “big bazooka”
“What we are doing now is making sure we support people through tough times. It’s a big bazooka,” he said in an interview with Bloomberg TV, during a visit to CityFibre Training Academy in Stockton-on-Tees.
“I’m not going to pretend that this is going to fix everything for everybody immediately. There is still going to be pressure.
“But it is a very, very substantial commitment by the Government to getting us through what will be still a bumpy time with the increase in energy prices around the world.
“What I think it will also help us to do is to get us through until I believe the prices will start to abate and we will be in a much, much stronger position.”
The Prime Minister was upbeat, despite gloomy predictions for the state of the economy in the months ahead.
“There are ways forward for the UK that are incredibly exciting,” he said. “If we make sure that we have a proactive approach to talent from abroad – we want to control immigration but allow the talent that we need to come in – we fix our energy supply issues, we fix the issues in the UK labour market.
“One of the incredible things about the economy right now is that unemployment is at its lowest level since I was two years old.”
Asked if the UK was heading for a recession, he answered: “Not necessarily at all.”
There were concerns that a £400 discount on energy bills for every household in the country, regardless of how well off they are, would further fuel inflation which is currently at nine per cent and could soon hit double figures.
Mr Johnson said the government didn’t believe the rebate would “lead to more discretionary spending, simply because people’s outgoings are going to go up, have been going up already as a result of the increased costs of energy and food.”
He added: “We can do it because we’re in a strong economic position, we’ve got loads of people in work earning, we’ve got unemployment at the lowest level since 1974, which I don’t think people would have predicted when we went into Covid and all those lockdowns.
“What we’re really dealing with is the economic aftershocks of Covid, spiking energy prices, we’ve got to get through it, we’re using our fiscal firepower to do it and we’ll come up much stronger the other side.”