UK budget aims to boost growth, extend energy aid

STORY: Britain's economy will avoid a recession this year.

That was the message sent by finance minister Jeremy Hunt on Wednesday (March 15) during his budget speech.

But he warned the economy would still contract in 2023.

"Today, the Office for Budget Responsibility forecasts that because of changing international factors and the measures I take, the UK will not now enter a technical recession this year."

Hunt said gross domestic product is forecast to shrink by 0.2% this year - better than the 1.4% decline projected in November.

Energy costs have come down since late last year, and there has been some signs of recovery in economic data.

But Britain is the only Group of Seven economy yet to recover its pre-health crisis size.

It has already gone through a decade of near-stagnant income growth before the health crisis hit, while inflation is still above 10%.

Hunt ruled out a major spending spree or big tax cuts in his budget plan.

He says restoring stability has been the priority since he took over at the finance ministry in the autumn, following the brief but chaotic premiership of Liz Truss last summer.

But Hunt confirmed a three-month extension of energy bill subsidies for households.

He also extended a decade-long fuel duty freeze and announced new support for childcare.