Rishi Sunak vows economy will 'fix’, says he’s '100% on it’ after shock rates spike | political news

The prime minister worked to reassure the country after the Bank of England raised interest rates to 5% following inflation rates of 8.7%. He spoke from a warehouse in Dartford, Kent.

By Tim Baker, political reporter

Thu 22 Jun 2023 16:45, UK

„I’m totally, 100% on it – it’s going to be okay,” Prime Minister Rishi Sunak said this afternoon, following a shock interest rate hike to 5% while inflation stuck at 8.7%.

Mr Sunak was speaking from a warehouse in Dartford, Kent, amid recent economic turmoil.

The former chancellor has sought to present her financial crisis and attention to detail as reasons the public can trust to cut both price growth and the Bank of England’s key rate.

Politics Latest: 'We’re going to get through this’

Mr Sunak made his primary pledge in early 2023 to „halve inflation” from 10% to 5% by the end of the year.

Speaking from the warehouse, Mr Sunak said: “You may have heard some news about inflation yesterday and you may have seen what the Bank of England announced today with interest rates.

„I’m sure that really fills a lot of you with some anxiety and worry about what’s going on and what it means for you and your families.

„I’m here to tell you that I’m absolutely, 100%, into it, and it’s going to be okay, and we’re going to get through this.”

Asked by Sky News whether he accepted his approach to the economy – keeping public wages low, shying away from tax cuts and pledging to halve inflation – would hurt his election chances, Mr Sunak was adamant.

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Ed Conway: The size of the rate hike is the shock treatment for the UK’s inflation problem

How can we control inflation?

He said that achieving his goal has „definitely” become difficult, „but it is certainly not impossible”.

The prime minister said the public could decide in „six months, nine months, a year” how he is doing and whether the economy is healthy.

Earlier in the day, he said halving inflation by the end of the year would be tough, but not impossible.

Mr Sunak spoke at the Times CEO Summit after the surprise Raising interest rates.

Mr. Sunak Said: „Obviously what’s happened in the last couple of months makes it difficult, of course it does. It goes without saying. But I’ve always said it’s going to be difficult.

„It’s obviously more challenging and it’s obviously become harder, but it’s not impossible, we’re throwing everything at it and that’s what I’m doing.”

Interest rates are set by banks independent of the government and affect the cost of borrowing, while inflation explains how quickly prices rise.

Speaking at a by-election campaign event in Boris Johnson’s former constituency, Labor leader Sir Keir Starmer warned the government „want to pretend it’s someone else’s fault” and „lessons” to „undermine our independent institutions” after Kwasi Kwarteng’s mini. Budget and its fallout last year.

„You have to ask why the UK is always so badly hit – the answer is 30 years of total failure by this government, a kamikaze budget and a failure to fix the fundamentals,” Sir Keir said.

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He added that the „worst prospect” that „mortgagors and households will pay the price of a Tory defeat” is „absolutely, completely unacceptable”. Labour’s new five-point plan For mortgages, released overnight.

Rishi Sunak and Andrew Bailey. Image: Twitter/Rishi Sunak

Speaking to reporters during the daily briefing earlier, the Prime Minister’s spokesman said Mr Bailey still had Rishi Sunak’s support.

He was repeatedly asked if the central bank chief was doing a good job in dealing with inflation, but did not respond in the affirmative.

This happened just before the surprise interest rate hike.

A Number 10 spokesman said: “The Prime Minister feels it is important that we continue to support the Bank in the work they are doing.

„You know there is an independent process for setting interest rates and we continue to work closely with them and work well with them to reduce inflation.”

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The bank aims to reduce inflation to 2 percent.

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