To ask the Chancellor of the Exchequer, whether the Treasury Economic Advisory Council has had recent discussions on the potential merits of the Bank of England creating a recession.
Answered on
26 June 2023
The Government recognises the challenges facing households due to the rising cost of living. Halving inflation by the end of this year is one of the Government’s key priorities. High inflation is also bad for the economy, in order to have high sustainable growth, we must first have low inflation. The Chancellor supports the independent Monetary Policy Committee of the Bank of England in raising interest rates, and doing whatever is necessary to drive down inflation and bring it back to the 2% target. The Office for Budget Responsibility (OBR) is the UK's official forecaster, and they will assess the changes in the macroeconomic outlook including the implications of Government policy, at the next fiscal event.
The Chancellor set up the Economic Advisory Council (EAC) as a forum to discuss issues in the economy, including the growth outlook and market conditions. Recent meetings have discussed short-term support to help the economy through 2023, and longer-term measures to grow the UK economy, as well how to increase labour market participation. A log of substantive contact was published in April here, which includes a brief summary of discussions for each meeting.