UK government does not expect a recession, junior treasury minister says

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LONDON, June 20 (Reuters) – The British government does not expect the economy to enter a recession, junior treasury minister Simon Clarke said on Monday, as fears of a downturn mount due to high inflation and stagnating growth.

“We don’t expect a recession, it is important not to talk ourselves into that mindset. There are obviously very significant challenges for the global economy … but there are also considerable underlying strengths to the UK economy,” Chief Secretary to the Treasury Clarke told Times Radio.

His comments come a week after a warning from the Confederation of British Industry that the economy faces stagnation next year and could easily fall into recession as it slashed its outlook for growth due to surging inflation. 

Clarke added that  the British government needs to be sensible about public sector pay, warning that above-inflation rises would only worsen general inflation that is predicted to top 11% later this year.

Teachers and doctors are among those who have threatened to vote on industrial action if their pay demands are not met.

“We need to be sensible around pay awards,” Chief Secretary to the Treasury Clarke, whose remit involves public sector pay, told Sky News. “We cannot have inflation-busting pay increases because that will in turn drive the problem we’re trying to sort.”

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