Hunt says UK in recession and set to shrink further next year

The government has acknowledged the UK is already in a recession after its independent forecaster predicted that the economy was set to shrink next year.

The Office for Budget Responsibility (OBR) says higher energy prices driven by the war in Ukraine are largely to blame for the expected downturn.

It also believes the country will not start growing again until 2024.

It comes as the chancellor lays out his plans to get the economy back on track.

Delivering his Autumn Statement to Parliament, Jeremy Hunt said “families, pensioners, businesses, teachers, nurses and many others are worried about the future”.

But he said the government would take “difficult decisions” to tackle inflation and promised his plan – which has been vetted by the OBR – would lead to a “shallower downturn”.

A recession is defined as when a country’s economy shrinks for two three-month periods – or quarters – in a row.

Typically during a recession, companies make less money, pay falls and unemployment rises. This means the government receives less money in tax to use on public services such as health and education.