The UK is facing its first recession in 14 years

LONDON: British Finance Minister Jeremy Hunt announced that the United Kingdom (UK) is now facing an economic recession that is expected to last for quite a long time.

The last time the UK experienced an economic recession was during the financial crisis in 2008 which also affected the global economy.

Hunt made the declaration in his hour-long finance speech called the Autumn Statement and raised concerns among lawmakers gathered in the House of Commons yesterday.

The situation is largely due to the war in Ukraine and the prolonged supply chain disruptions caused by the Covid-19 pandemic.

Former Prime Minister Lizz Truss and her top economist are also said to be at fault as her plan to cut taxes caused shock waves in the financial markets.

As Hunt spoke, UK shares fell to their lowest point of the day, but recovered losses to close flat by the end of trading in London.

The British pound, however, fell about one percent to trade at 1.17 to the United States (US) dollar.

The fall came despite the government releasing its plans ahead of Hunt’s televised speech, hoping the news would not spook investors.

Hunt said the government will keep the energy price cap introduced by Truss, but will raise the cap slightly from next April.

Oil and gas companies will also be forced to pay a higher tax, known as a windfall tax, on their profits that surge following the increase in oil and gas prices until 2028.-AGENCIES

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