Prime Minister risks 'wilful' move to push UK into recession as inflation soars

Prime Minister Boris Johnson
Prime Minister Boris Johnson

BORIS Johnson has been accused of risking a move to “wilfully push the UK into recession” by continuing a Brexit standoff with the EU as inflation hit a 40-year high.

But the Prime Minister has insisted his Government has the “fiscal firepower” to reverse the trend.

The rate of consumer prices index (CPI) inflation rose from 9 per cent in April to 9.1% in May, according to the Office for National Statistics (ONS) .

The increase matches what analysts had expected and pushes the measure to its highest since early 1982, according to ONS estimates.

“Though still at historically high levels, the annual inflation rate was little changed in May,” said ONS chief economist Grant Fitzner.

“Continued steep food price rises and record high petrol prices were offset by clothing costs rising by less than this time last year, and a drop in often fluctuating computer games prices.

“The price of goods leaving factories rose at their fastest rate in 45 years, driven by widespread food price rises, while the cost of raw materials leapt at their fastest rate on record.”

The change was in large part driven by the increase in food prices, which added more than 0.2 percentage points to the inflation number, the ONS said.

Clothing and footwear prices helped keep a lid on inflation, while recreation and culture prices also pulled it downwards.

READ MORE: UK inflation rises again to hit 40-year high

The news will add to the squeeze faced by many people across the UK. Energy bills rose by 54% for the average household at the beginning of April and will remain at this level until October.

But forecasts released this week predict that the Government cap on energy bills could rise again from an already record high £1,971 to £2,980 in the autumn.

The Bank of England has predicted that inflation will spike at more than 11% in October after the price cap is changed again.

Speaking at Prime Minister's Questions, SNP Westminster leader, Ian Blackford, warned that “inflation is now at a 40 year high”.

He said: “Families right across these islands are seeing their income squeezed as prices rise, bills soar and Tory cuts and tax hikes hammer home.

“After 12 years in government, the Tories have left the UK economy in the doldrums and pushed millions of people into poverty.

“So can I ask the Prime Minister, does he think his Government bears any blame for the fact that the United Kingdom is doing so much worse than our European neighbours?”

But Mr Johnson stressed a “global inflationary problem” was being dealt with, adding that “this government has the fiscal firepower to deal with it”.

He added: “That is, I think a benefit to the whole of the United Kingdom including Scotland as we've seen throughout the pandemic.”

But Mr Blackford accused the Prime Minister of making excuses, warning that “the UK economy is lagging behind on his watch”.

He said: “If you look at France, inflation is less than sex per cent there.

“This morning support from the Resolution Foundation and the London School of Economics is the latest in a string of devastating reports on the outlook for the UK economy.

“The report could not be clearer – the Tory Government's disastrous Brexit is driving wages down, driving inflation up and will make us poorer over the next decade.

“But instead of reversing course, the Prime Minister is recklessly threatening a trade war at the worst possible time.

“Will he finally come to his senses and negotiate an economic agreement with the EU or is he going to wilfully push the UK into recession?”

Buit the Prime Minister insisted that “nobody wants a trade war at all, nor is there any need for one”.

Mr Johnson added: “I think he's under estimating what this country is currently achieving – not just the Moderna investment but a record venture capital investment in this country, which has now overtaken China as a venue for venture capital investments.

“Of course the benefits of that are being felt throughout the whole of the United Kingdom.”