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Chancellor Faces Treasury Select Committee Questions On Autumn Statement


Speaking to the House of Commons Treasury select committee on last week's Autumn Statement, Chancellor of the Exchequer Jeremy Hunt is asked by Committee Chair Harriet Baldwin (Con) why he has allowed debt to remain at current levels, Hunt: "I think we are making good progress on all three objectives [halving inflation, lowering debt, economic growth], they are linked. When you have high inflation and therefore higher interest rates, debt interest payments go up and the fiscal situation deteriorates."

  • Hunt states that the halving of inflation and getting back to the BoE's 2% target will assist, "over time to reduce debt interest costs, which in turn makes it possible to reduce debt". Hunt says UK is meeting its "fiscal rule" for debts to "start reducing". Chancellor says his statement "prioritised growth", claiming that, "Growth is the way that we will generate the income that allows us to make significant inroads into reducing our debt,"
  • Asked if his fiscal rules are "the loosest" since the establishment of the Office for Budgetary Responsibility (OBR), Chancellor says the OBR stated gov't was dealing with tight fiscal situation. Hunt: "We faced a truly exceptional situation last year which I think the markets accepted if we had stayed with the fiscal rules as they were, we would have had to consolidate in a way that would have been damaging,"
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