Hunt says inflation figures ‘strengthen case’ for current rate – while Labor government ‘missing action’
Reacting to today’s figures showing inflation is stubbornly high, Chancellor Jeremy Hunt said the new figures “strengthen the case for the government to stick to its guns”.
New figures show the consumer price index (CPI) rose 8.7 per cent in the 12 months to May, unchanged from April.
Meanwhile, core inflation, which excludes volatile items such as food and energy prices, rose to 7.1 percent in May from 6.8 percent in April.
This means that core inflation in the UK economy has reached its highest level in 31 years.
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Mr Hunt said: “Well, today’s figures strengthen the case for the government to stand its ground, regardless of pressure from left, right or centre.
“We’re not being thrown off course, because if we’re going to help families, if we’re going to ease the pressure on people with mortgages, on businesses, we need to squeeze every last drop of high inflation out of the economy. .
“And if you look at what’s happening in other countries, you can see that raising interest rates reduces inflation over time. Here it will be like that, but we need to be patient, we need to stick to the course, otherwise we will move to the other side”.
The chancellor also gave the Bank of England the government’s full support ahead of tomorrow’s interest rate update, with another hike expected.
“We will not waver in our determination to support the Bank of England as it seeks to squeeze inflation out of our economy while also providing targeted support for the cost of living,” he said.
Reacting to the chancellor’s announcement today, Labour’s shadow cabinet minister Jim McMahon said Sky News he is “not sure” what Mr. Hunt actually means.
He questioned whether “sticking to your guns” meant food inflation continued to rise and “make the cost-of-living crisis more difficult for workers”.
The shadow environment secretary accused the government of “either not working or being so slow to act that we’re just not seeing the progress we need”.
Labour’s shadow chancellor Rachel Reeves also issued a statement, saying the government “can’t take control of this problem because it’s their problem”.
She added: “13 years of the Tories and their disastrous mini budgets are damaging our economic security and leaving families worse off.
“Simply continuing the Tory-owned path of managed decline is not the pinnacle of Labour’s ambitions. We need a more secure economy, more secure family finances and a plan to help us take advantage of the opportunities in front of us.”
Meanwhile, Lib Dem Treasury spokeswoman Sarah Olney said the government was “failing miserably to reduce inflation and provide support for struggling families facing high bills”.
She added: “Home owners now face the prospect of even more interest rate rises, which will increase their monthly mortgage payments, while the chancellor sits idly by.
“It is unbelievable that ministers are refusing to support families in dire straits when this crisis has been caused by the Conservative government’s catastrophic failure to manage the economy.
“This has got to be the most uncaring government that has ever walked into Downing Street. Allegedly, the ministers live on another planet.”
