London, Thanasis Gavos

UK Chancellor of the Exchequer Jeremy Hunt said he would be “comfortable” with a recession in the UK economy if it was a necessary price to reduce still-high inflation.

The latest data on inflation in April showed it fell from 10.1% to 8.7%, the first time in single digits since August.

Still, most economists had expected the decline to be larger, at 8.2%, while core inflation, which excludes volatile energy and food prices, rose from 6.2% to 6.8%.

Speaking to Sky News Mr Hunt said he would fully support a decision by the Bank of England to raise the key lending rate further.

Many analysts believe the rate could go as high as 5.5% from 4.5%, a 15-year high that has now been set after 12 consecutive hikes.

Asked whether he would be comfortable with the potential for a recession from further interest rate hikes, the British minister replied: “Yes, because ultimately inflation is a hotbed of volatility. And if we want to have prosperity, to grow the economy, to reduce the risk of recession, we need to support the Bank of England in the difficult decisions it makes.”

Although the International Monetary Fund estimated this week that the UK would avoid recession, many British economists see recession as likely due to further interest rate rises expected.

“There is nothing automatic about reducing inflation, it is a difficult task, but we have to fulfill it and we will do it. It is not a choice between inflation and recession. Ultimately, the only path to sustainable growth is to bring down inflation,” added Jeremy Hunt.