PM Rishi Sunak and Chancellor of the Exchequer Jeremy Hunt took to Twitter today to provide a live update on Sunak’s plans to combat inflation and support the cost of living for the public. Sunak outlined his vision for growing the economy and creating better job opportunities across the UK. He emphasized the importance of making the UK an attractive business destination through agile regulation, competitive visa schemes, and promoting the country’s strengths globally.
In addition to providing immediate relief, Sunak expressed his commitment to addressing long-term challenges to ensure a better future for future generations. His top three priorities include halving inflation, fostering economic growth, and reducing debt. Sunak highlighted the government’s efforts to tackle inflation by removing barriers to work and safeguarding national energy security. Increasing employment rates and boosting domestic energy production are seen as key factors in reducing inflation.
Jeremy Hunt Explains Factors Contributing to High Inflation, Particularly in Food Prices
Jeremy Hunt acknowledged the impact of high inflation on families and businesses throughout the country. He addressed the reasons behind the UK’s elevated inflation levels, particularly in food prices. Hunt attributed the high inflation to a supply chain shock following the pandemic and the invasion of Ukraine by Russia. The disruption caused a spike in wheat prices, as Ukraine is a significant exporter of the commodity. Moreover, record gas prices resulting from the conflict contributed to increased costs in food production, storage, and transportation.
Hunt emphasized that high gas prices have a cascading effect on food prices. Due to price agreements made in advance for gas and agricultural products like wheat, consumers experience a delay in benefiting from reduced wholesale gas prices. While acknowledging the impact on the UK, Hunt highlighted that core inflation is higher in 14 EU countries. He mentioned that the UK’s high gas usage and one million job vacancies further contribute to inflationary pressures.
Government Actions to Combat Inflation and Lower Cost of Living
To combat inflation, the government has taken various actions. These include measures to reduce energy bills through the Energy Price Guarantee, which has already resulted in a decrease in peak inflation. Additionally, collaboration with food producers, supermarkets, and regulators aims to explore avenues for lowering prices. Hunt expressed his intention to meet with regulators to discuss further initiatives. The government has also delayed plans to ban multi-buy/BOGOF deals.
The low unemployment rate in the UK is cited as a factor driving inflation. With one million job vacancies, the government’s focus is on getting Britons back to work by expanding free childcare services. Hunt stressed the importance of responsible public spending, highlighting that unnecessary borrowing could fuel inflation and pressure the Bank of England to increase interest rates. He refuted the notion that short-term mortgage support would be beneficial if it led to prolonged high inflation.
Hunt pointed to international examples where interest rate hikes have effectively reduced inflation over time, assuring the public that the UK will experience a similar outcome. However, patience is required, and adherence to the government’s plan is crucial to achieving this goal.
Overall, the joint Twitter update by Sunak and Hunt outlined their strategies for addressing inflation and supporting the public’s cost of living. Their focus on economic growth, job creation, and responsible fiscal management aims to navigate the challenges and achieve a favourable outcome for the UK.