Dharshini David
Economics Correspondent

Many people are having it pretty tough - the spike in energy and food costs has been a truly global problem.

Despite what the chancellor will say, the UK has had a particularly rough ride over the last few years. Unlike other major wealthy nations, our economy is still smaller than it was prior to the pandemic.

And many economists think we’re in for trickier time than most of them this year.

There are several reasons. Our energy mix is particularly gas heavy, for example, so we’re vulnerable to price surges.

We’ve been hit hard by labour shortages in sectors such as hospitality and retail. The latter has been heightened by Brexit, which has also increased red tape - costs to businesses that trade with the EU.

And some analysts warn that the lingering uncertainty - for example, over trading arrangements in Ireland – could be one reason why businesses aren’t investing as much as we’d like.

So the chancellor’s plan to jump-start prosperity by focusing on employment, enterprise, education, everywhere - spreading the gains nationally - comes at a crucial time.

But creating the right conditions to deliver on will be the challenge to meet if Global Britain is to hit its stride.

Image source, Getty Images

Let's take a look now at what Labour have said recently about their plans for the economy.

The party's leader, Sir Keir Starmer, told business leaders at the World Economic Forum earlier this month that a Labour government would do more to draw foreign investment into Britain, especially in "green industries".

He said foreign investment had declined sharply under the Conservatives and Labour would push to "bring global investors back"

His predecessor, Jeremy Corbyn, shunned the elite gathering, which he described as a "billionaires' jamboree".

But Sir Keir and shadow chancellor Rachel Reeves have taken a much more pro-business stance.

Read more on this story.

Image source, Getty Images

Jeremy Hunt was named as the UK's chancellor in October last year.

He replaced Kwasi Kwarteng, who'd been sacked by the PM at the time, Liz Truss, after a turmoil inducing mini-budget.

Hunt is a big name in the Conservative Party, he's tried to become the leader twice. But despite not making it to the top spot, he's served in heavyweight cabinet roles such as health and foreign secretary.

Within 24 hours of taking up his role as Chancellor of the Exchequer, he scrapped Liz Truss's economic strategy of wide-ranging tax cuts - she lasted just 45 days in office.

Hunt was first elected to parliament at the 2005 general election as the MP for South West Surrey.

Prior to his career in politics he worked as an English teacher in Japan and as an entrepreneur - co-founding the Hotcourses education publisher.

When the business was sold in 2017, he netted a reported £14m, making him one of the UK's richest politicians.

Read more about Jeremy Hunt here.

Image source, PA

As we’ve been reporting, Jeremy Hunt is due to speak at Bloomberg’s European HQ, at 9am, where he will outline his plans to try and achieve long-term growth in sectors across the UK.

The chancellor’s speech comes at a fraught time for the economy – with concerns raised in various parts of British industry.

• On Monday, Tony Danker, director-general of the Confederation of British Industry (CBI), said the UK had been “spectacularly overlapped and overtaken on green growth”.
• According to the Telegraph, he also said last week: “Money is leaving the UK. Investors are freezing up and the heart of the problem is that we don’t have a strategy”.
• Meanwhile, off the back of news that UK car production is at a 66-year low, the Society of Motor Manufacturers and Traders chief executive Mike Hawes warned that Britain’s refusal to offer services such as state aid to manufacturers would only pave the way for other countries to “hoover up” international investment
• Also, the head of the Unite Union has warned that the steel industry in the UK is "a whisker away from collapse" - though the government is expected to announce a £600m support package to help Britain's two biggest steelmakers go green.
• This follows the collapse of UK battery start-up Britishvolt. It had planned to build a giant factory to make electric car batteries in Blyth, Northumberland

The last time we heard Chancellor Jeremy Hunt make a major speech was when he delivered his much-anticipated Autumn Budget in the House of Commons in November.

Since then, he’s largely been out of the spotlight - until last week, when the Treasury released a video of the chancellor explaining inflation using coffee cups.

In the clip, Hunt orders a flat white before using cups to illustrate what he is doing to tackle rising prices.

He says a cup of coffee a year ago was “around £2.50”, but is now “nearly £3”.

He then sets out the reasons for high inflation, such as the war in Ukraine and Covid-19.

Cross-party reaction to the video was largely negative, with the Lib Dems branding it "Mr Bean-esque” and Labour saying the video failed to acknowledge that “the British public have been so exposed to economic shocks and the energy crisis because of 13 years of Tory failure”.

The media also took a dim view of the video - LBC Radio nicknamed Hunt “Chancellor Bean” while outlets such as GB News described the video as “cringeworthy”.

Official figures show the economy contracted by 0.3% between September and November. If the next quarter also shows a fall, it will mark the official confirmation that the UK has met what is technically defined as a recession.

So what does that mean?

Well, if the economy is doing well, the economic activity of companies, government and individuals increases month by month, meaning people are, on average, slowly getting a little bit richer - this is economic growth.

A recession is when the opposite happens, and the economy shrinks. If it shrinks for two consecutive three-month periods, that's classed as a recession.

The last official figures we had, on 13 January, showed a little bit of growth in October and November - driven partly by the football World Cup - which made it less likely that the economy had entered recession at the end of last year.

But the UK is not out of the woods yet, by any stretch of the imagination.

Read more: What is a recession?

Image source, .

Image source, Jessica Taylor/UK Parliament

Jeremy Hunt delivered his first Autumn Statement as chancellor last November.

That, along with the Budget - his first one is due in March - sets out the government’s plans for the economy.

In it he revealed tax rises and spending worth billions of pounds aimed at mending the nation's finances.

But the Institute of Fiscal Studies accused the chancellor of putting off tough decisions for two years, allowing borrowing to grow and tax as a share of the economy to rise to historic UK highs.

The Resolution Foundation think tank said the plans pile further pressure on "squeezed middle" earners.

Jeremy Hunt defended his approach, denying his tax plans amount to a raid on working people, saying it was not possible to raise £25bn by only taxing the wealthiest.

But he did acknowledge there were "very difficult times ahead".

Labour said the chancellor had picked the nation's pockets with "stealth taxes" and accused the Tories of crashing the economy and making working people pay.

We've got very used to hearing gloomy things about the economy in recent months.

Inflation - the rate at which prices are rising - hit a 40-year high towards the end of last year. It's dropped back slightly now, but it's still eye-wateringly high mainly due to soaring energy prices and food costs.

Wages are not keeping up with those rising prices, which is one of the reasons we're seeing so many strikes.

In response to inflation, the Bank of England has increased interest rates to 3.5%, the highest level for 14 years - which has hit many people with increases on their mortgage payments.

The UK economy has managed to avoid recession - but only narrowly. And there are forecasts that a slowdown will happen this year. More on that in a moment.

Faisal Islam
Economics editor

Chancellor Jeremy Hunt will today set out a plan to boost high-tech growth with his first major speech about the long-term future of the economy.

He will reject what he calls declining and pessimistic forecasts and stress a future in research based industries of the future such as artificial intelligence (AI).

But the speech comes in a week that business groups have been increasingly open about concerns that the UK risks falling behind other nations on green investment. Some in his party are also concerned about rising taxes.

The chancellor wants to stress a rosy future for the UK using its post-Brexit regulatory freedoms to forge ahead in the industries of the future, from AI to medicines and decarbonisation.

He will attack what he calls the “declinism” of the opposition, as he stresses the work he commissioned from the chief scientist Sir Patrick Vallance on how to nurture key industries of the future here in the UK.

But all this comes amid growing pressure on the government from backbenchers troubled by plans to raise taxes significantly. And perhaps most notably, business lobby groups have become increasingly willing to question in public whether the government has a convincing plan to take on competitors, especially over investments in green technologies.

The US and EU are also trading blows over massive subsidies to these industries. And the opposition, currently riding high in the polls, is courting business with its own green prosperity plan.

Image source, UK Parliament

News about the economy has been a bit of whirlwind of late, so here’s a reminder of some key moments:

Truss’s mini-budget: During her brief stint as Prime Minister, Liz Truss and her Chancellor Kwasi Kwarteng announced the biggest package of tax cuts in 50 years, but didn’t explain how they would pay for them, triggering market turmoil and a great deal of pain for some mortgage holders and first-time buyers.

Hunt appointed: Truss replaced Kwarteng with Jeremey Hunt and he quickly reversed most of those plans.

Autumn Statement: Hunt stayed on when Rishi Sunak became PM. In his November Autumn Statement he outlined a raft of policies to try to balance the government’s books, including:

• Continued, but less generoushelp with energy bills from April
• State pensions and many benefits continuing to rise in line with inflation
• Freezing several tax thresholds, meaning many people will pay more tax
• Increasing and expanding the windfall tax on energy companies

Sunak’s pledges: In January, Sunak outlined his vision with five pledges, including three about the economy:

• Halve inflation this year
• Grow the economy, creating better-paid jobs and opportunity right across the country
• Make sure our national debt is falling

Hello and thanks for joining us as we wait to hear from Chancellor Jeremy Hunt.

He’ll be making a speech at Bloomberg’s European HQ, in London, at about 9am - and is expected to set out the government’s long-term plan for economic growth in multiple sectors across the UK.

This is not one of Hunt’s official budgets or statements - like the Autumn Statement which we heard in November - but it’ll be interesting to hear what he has to say against the backdrop of predictions of an economic slowdown, soaring government borrowing, gloomy warnings from industry and ongoing strike action in the public sector.

Hunt’s due to talk for about 45 minutes, he’ll then take questions from members of the media. Stay tuned for live updates and analysis of the speech, as well as reaction.