Rishi Sunak has said inflation is the “number one enemy”, as he vowed to rebuild trust in the Government following Liz Truss’s calamitous tenure in No 10.
The Prime Minister said he is doing everything he can to “grip” the issue and limit rises in mortgage repayments, as the Bank of England is forced to put up interest rates to curb rising prices.
On Thursday, the Bank warned the country is facing the longest recession in a century as it hiked base rates by 0.75 percentage points to 3% – their highest level in 15 years.
With many families now facing crippling rises in their monthly mortgage bills, Mr Sunak told The Times that he understood their concerns as they worried how to make ends meet.
“I absolutely recognise the anxiety that people have about mortgages. It’s one of the biggest bills people have,” he said.
“So what I want to say to people is that I’m going to do absolutely everything I can to grip this problem, to limit the rise in those mortgage rates.
“I think inflation is the number one enemy, as Margaret Thatcher rightly said. Inflation has the biggest impact on those with the lowest incomes. I want to get a grip of inflation.”
With the UK facing an estimated £50 billion black hole in the public finances, Mr Sunak said it was important the Government was honest with voters about the “trade-offs” the country faced in Chancellor Jeremy Hunt’s forthcoming autumn statement.
“Everyone appreciates that the Government cannot do everything. How does government do everything? It just does it by borrowing money which ultimately leads to, as we saw, high inflation, a loss of credibility, spiking interest rates,” he said.
Among the measures Mr Sunak and Mr Hunt are considering to address the deficit are a further two-year freeze on the lifetime pension allowance and the imposition for the first time of VAT on electric vehicles, The Daily Telegraph reported.
Mr Sunak acknowledged that after the turmoil of Ms Truss’s premiership, the Conservatives urgently needed to rebuild the trust of the public.
He pointed to his own record as chancellor – when he introduced the Covid furlough scheme – as to why people should trust him when it comes to running the economy.
“I completely acknowledge that trust has been damaged over the past few weeks and months. I realise that trust is not given, trust is earned. My job is to regain people’s trust,” he said.
“The only thing that people will take away from the summer – hopefully from my track record as chancellor – I’m someone they can trust understands the economy.
“I’m someone they can have confidence in, who will manage us through what will be a difficult economic time. I’ve got a track record in doing it.”
Apart from the autumn statement, Mr Sunak said the main issue preoccupying him over the preceding 48 hours was the migrant crisis in the English Channel.
He defended Home Secretary Suella Braverman’s controversial claim that the south coast was facing an “invasion” of illegal migrants – although he did not use the word himself.
“What Suella was doing was conveying a sense of scale of the challenge we face, which is serious and unprecedented.
“There is no easy overnight fix to that challenge. But people should know that I’m very committed to addressing it,” he said.
Mr Sunak’s path to No 10 was finally clear when Boris Johnson announced he was not standing in the race to succeed Ms Truss having failed to persuade his former chancellor to support him during an hour-long meeting.
“I was very clear with him about the fact I had strong support from colleagues in Parliament and I thought I was the best person to do the job. I was going to put myself forward for it. It was very cordial,” Mr Sunak said.
Mr Sunak also spoke of the significance of becoming the first British Asian, and the first Hindu, to become Prime Minister of the UK.
“It meant a lot of things to a lot of people. As chancellor I was able to light my Diwali Diya’s on the steps of Downing Street. It said something wonderful about our country that that was possible, but also that it wasn’t a big deal,” he said.
“It was in a sense gosh, this is great but also that’s just Britain. That’s what you would expect from Britain. Hopefully it’s a source of collective pride across the country.”