The prime minister told his audience that further government intervention “will not help anyone in the long run.” Credit: Kin Cheung/PA
Rishi Sunak said cutting taxes now would be irresponsible and would not help anyone “in the long run” due to the state of the economy.
Mr. Sunak argued that any a policy of increased borrowing should be a “wake-up call” amid high inflation, rising mortgage payments and the Bank of England's 13th consecutive hike in interest rates.
However, the prime minister also tried to positive attitude for the long term during the PM Connect event, stating to the audience in Kent: “I'm 100% ready for this, everything will be fine.”
When asked by The Telegraph if there was still any chance of a significant tax cut before the end of the year, Mr Sunak said: “Look, this goes back to what I told you all before. Would I like to cut your taxes tomorrow? Yes, of course I would.
“I am a conservative politician. Who wouldn't want to lower taxes for the public, right? Do you think if I thought it was a good thing, I wouldn't do it? Of course you would, right?
“But it goes back to what I said before. Borrowing a lot of money to make things that sound great is not a responsible approach. It won't help anyone in the long run.”
2306 UK inflation versus
Warning that further government borrowing would “just add fuel to the fire of inflation”, he added: “Inflation is a tax. So if we can cut inflation in half and then bring it up to two percent over time, that would be the biggest tax cut we can get.”
Mr Sunak pointed to the billions already spent supporting electricity bills and vowed Downing Street would “stick to our plan” amid pressure from some Conservative MPs to protect mortgage debtors from rate hikes.
He has also faced occasional calls for higher wages in the public sector.
“Every time you hear from a politician or anything that means the government will borrow more money, it should cause anxiety in your mind,” he said.
“If I did all this stuff, it could be fine for a day, a week, a month, and pretty quickly it would turn out to be a really bad idea.”
Mr. Sunak once again declined to say whether he supported Boris Johnson's privileges committee report after Monday's missed vote, but insisted people should “be held accountable for their actions,” adding: “It happened, he's no longer a member of parliament.”
In a separate speech at The Times CEO Summit, Mr Sunak acknowledged that his pledge to halve inflation by the end of 2023 has “clearly become more difficult” over the past two months, “but it's not impossible.” .
On Thursday, Conservative MPs spoke out against the decision of the Bank of England to raise interest rates again.
< p>Sir John Redwood, former head of policy number 10 under Margaret Thatcher, said: “The Bank made a big mistake in the year after Covid… I don’t know why the Bank couldn’t see the likely inflationary consequences of their actions. own actions.”
Craig McKinley, the Conservative MP for South Thanet, told The Telegraph he was “concerned that this would actually raise inflation, not lower it,” while Lucy Allan, MP for Telford, called the Bank's approach “myopic”.
The former cabinet minister added: “The Bank of England made a mistake. They need to lower interest rates and thus relieve inflationary pressures, especially wage and mortgage inflation, and keep the economy growing.”
The Small Business Federation (FSB) accused the Bank of “risk of slowing economic growth”. in our small business community”, urging ministers to raise the VAT threshold from £85,000 to £100,000 to “soften some of the hardest hits” of inflation.
Martin McTag, FSB chairman, said: “While higher interest rates are a tool to control inflation, the weight of rising spending means consumers have less disposable income to circulate in the economy. When the money in their pockets is worth less, the result is less sales to the business.
“Rising interest rates are not just numbers on a page, they are realities that affect consumer behavior. The Bank of England must act cautiously, keeping these wide-ranging implications in mind.”
2,705 underestimated inflation
A YouGov poll this week found that more than 80% of voters now believe Mr. Sunak is failing with lower inflation and reduced NHS waiting lists.
Three-quarters, 76% of respondents, said he was bad at getting asylum-seekers out quickly who arrived illegally in small boats.
Lord Hammond of Runnymede, former Chancellor, in an interview LBC Radio suggested that the government should loosen immigration rules to ease the mortgage crisis, but a spokesman for Mr. Sunak dismissed the idea.
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