THIS week the British economy has proved more resilient than many feared – with inflation and energy bills finally on their way down.
Yesterday we had the welcome news that inflation — this insidious tax on pay cheques and savings — has fallen to its lowest rate in over a year.
And today, energy regulator Ofgem will set the new Energy Price Cap where recent falls in gas prices will feed through to bills from July.
But the war is not yet won.
While the latest fall in inflation shows we’re on the right track, there is no room for complacency — especially on food prices where I know families are feeling the pinch.
While all the major forecasters now agree we are set to halve inflation this year, this won’t happen automatically. We have to stay the course.
That’s why halving inflation this year is one of the Prime Minister’s priorities.
A big driver of inflation is the price of food. That’s why this week I have been meeting with food producers to examine what I can do to help consumers, and working with the competition watchdog to make sure pricing is fair for customers.
The UK is not alone in feeling the pain in the weekly shop.
High rates of food price inflation are hitting consumers in Germany, Sweden and Portugal. In several countries in Europe it has been at more than 20 per cent.
But we are providing one of Europe’s most generous support packages to families across the country, worth £3,300 per household on average over this year and last.
All, in part, funded by windfall taxes on oil and gas profits.
Another challenge is that we have near record low unemployment, but still around one million vacancies.
Now we have left the EU and ended the old model of unlimited, low-skill migration, businesses should be able to get the workers they need from within the UK, without always having to look overseas.
So we have a plan to get more Brits back in work with a huge expansion of free childcare, better support for people with an illness or disability, and strengthening the way the sanctions regime is applied for those who fail to take a job.
And we also need to rise to the challenge of slow growth that all major Western economies are facing.
The IMF has said we will avoid recession, and given Britain a big upgrade to our growth forecast.
We’re great country
Growth means better-paid jobs, more opportunities across the country and extra revenue to fund better public services like our NHS.
Another part is making sure British businesses can grow. That’s why we cut business taxes by £27billion in my Budget.
Despite what you may hear, that’s why the UK is one of the best places to do business.
The doomsters will say otherwise. They snigger and tell you that Britain’s best days are behind us, we can’t become Europe’s most dynamic economy and that high inflation is here to stay.
But I say we are a great country, with booming growth sectors, a global outlook and world-class talent.
We have dealt with high inflation in the past and will do so again.
Yes, we’ve had a rocky patch with a pandemic and Putin’s energy shock. But picking up some newspapers recently, you would think we were alone in facing economic challenges.
So let’s look at the facts.
Since the Brexit referendum, the UK has grown faster than France, Japan and Italy — and at about the same rate as Germany.
We remain the world’s ninth largest manufacturer, the second largest services exporter, the third largest tech economy, the second largest financial hub and home to Europe’s largest life sciences, film and TV sectors.
A recent report from auditors PwC found that the UK was the third-most attractive country for CEOs expanding their businesses, with Marks & Spencer, BAE and Pinewood Studios all announcing thousands of jobs here.
If the big upgrades to our growth forecasts show us anything it is that you can’t write Britain off.
To repeat what an American bank chief reportedly told clients last month about the UK economy, “We have been wrong, plain, and simple.”
But we will only achieve our ambitions and ease the pressures on families and businesses by sticking to the course, holding firm on our tough decisions and refusing to accept this toxic narrative that Britain is somehow in decline.
The Prime Minister has set out three clear economic priorities that we will deliver — halve inflation this year, grow the economy and reduce debt.
That is what we have asked you to judge us by.
And while this week shows we have made some progress, we are under no illusions — the job is by no means done.
But if we stick to the course, it will be.
