Inflation warning issued by Hunt who admits September ‘blip’ is on the way

Jeremy Hunt discusses tackling problems with inflation

Jeremy Hunt has warned inflation could rise this month while insisting the Government’s plan to ease the cost of living is working.

The Chancellor said Rishi Sunak’s pledge to halve inflation will be kept this year, batting away Tory calls for tax cuts by saying he will “stick to the plan”.

Speaking today, he said: “The plan is working, inflation is coming down.”

When it was put to him that inflation could have risen in August, he said: “I do think we may see a blip in inflation in September. But after that the Bank of England is saying it will fall down to around five percent.

“And you know, if we are going to put money in people’s pockets quickly, the fastest thing I can do is to deliver the prime minister’s pledge to halve inflation, because that puts not 1p in the pound, which might be a tax cut, but 5p in the pound in people’s pockets that they wouldn’t have had if inflation stays high.”

READ MORE. ‘We have bounced back’ – Sunak is on course to halve inflation by Christmas

Inflation, as measured by the Consumer Price Index (CPI), has eased to 6.8 percent from a peak of 11.1 percent last October. But it remains significantly above the Bank of England’s two percent target.

The Chancellor said there was “nothing” he wanted more than to bring the “tax burden” down for Britons.

Mr Hunt added that one way to do this is by growing the economy and “good progress” is being made. Another options is to “spend taxpayers’ money more efficiently”, Mr Hunt said.

He has written to secretaries of state to ask about how much time public servants are spending on “unnecessary admin”.

“What we need to do now is to restart the public service reform agenda. It’s not about asking to work harder. They work very, very hard. But it’s about using money more efficiently,” Mr Hunt said.

He was adamant the reform agenda would not involve “more cuts.”

Mr Hunt also denied he would have made different decisions in his role as Chancellor had he known the UK economy had bounced back from the pandemic faster than expected.

The Office for National Statistics (ONS) revised its estimate for the UK’s post-pandemic growth, saying the economy was larger in 2021 than in 2019.

Asked whether he would have changed course had he known, Mr Hunt said: “No, because the decisions we took were primarily because we had to bring inflation down which peaked at over 11 percent.

He said: “A series of incredibly difficult decisions that Rishi Sunak and I took because we knew that until you get inflation down you can’t end the misery for families who see the cost of their weekly shop going up, the cost of filling up their tank of petrol. That was an absolute priority for us.”

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Don’t miss…
Inflation set to RISE in new blow for mortgage rates, house prices and tax cuts[LATEST]
Mortgage expert accuses Bank of failing the British public with every rate rise[DISCOVER]
House prices plunge as mortgages rocket £500 a month – BoE to make it worse[COMMENT]

The UK’s economy recovered from the pandemic even faster than Germany, France and Japan.

Britain was believed to be the only G7 economy that was still smaller than before Covid.

The ONS said the economy in the final quarter of 2021 was in fact 0.6 percent larger than the final quarter of 2019 – much higher than previous figures saying it was 1.2 percent smaller.

Yearly growth for 2021 was revised up a significant 1.1 percentage points to 8.7 percent, while the crash caused by the 2020 lockdown was revised down by 0.6 points.

In its last set of data, the ONS had said in the three months to the end of June 2023, the economy was 0.2 per cent smaller than pre-pandemic levels, leading to mass criticism of the Government’s economic programme.

Mr Hunt had said the news “shows that once again those determined to talk down the British economy have been proved wrong”.

He added: “There are many battles still to win, most of all against inflation so we can ease cost of living pressures of families. But if we stick to the plan we can look forward to healthy growth which according to the IMF will be faster than Germany, France, and Italy in the long term.”

The revision gives No.10 and Mr Sunak a major boost, especially given that “increased economic growth” is one of his five key pledges.

Source: Read Full Article