Say what you like about Kwasi Kwarteng, and by now most people have, but he certainly put on a show. Last September he announced an ambitious plan to make the UK’s debt unsustainable, allowing hedge fund managers to short the plummeting pound. By October he’d announced an ambitious plan to seek new employment opportunities elsewhere. His successor as chancellor, Jeremy Hunt, made it his first priority to be as boring as possible, and today’s spring Budget was well telegraphed to the same financial markets that sealed Kwarteng’s fate.
But while the UK’s short-term finances have improved, partly thanks to a relatively mild winter that has reduced the cost of energy subsidies, the future that Hunt is trying to chart a steady course towards is not optimistic. The Bank of England’s most recent forecast is that the UK economy cannot sustain GDP growth of over 1 per cent without a resurgence of inflation. Relative to the ten years before the pandemic, the UK’s growth potential has halved.
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