Rishi Sunak pledged to limit the impact of rising inflation on people with mortgages, while promising to restore trust in government.
The prime minister said inflation was ‘enemy number one’ and he was doing everything he could to ‘grasp’ the problem.
Sunak told The Times he understands the worries of families facing crippling increases in their monthly mortgage bills, after the Bank of England raised base interest rates by 0.75 percentage points to 3% – their highest level in 15 years.
“I fully recognize the anxiety 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 tackle this problem, to limit the rise in these mortgage rates.
“I think inflation is enemy number one, as Margaret Thatcher rightly said. Inflation has the greatest impact on those with the lowest incomes. I want to control inflation.
The Bank of England was forced to raise interest rates to rein in rising prices and warned on Thursday that the country faces its longest recession in a century.
With an estimated £50billion black hole in public finances, Sunak said it was important the government was honest with voters about the ‘trade-offs’ the country faced in the upcoming autumn statement from the Chancellor Jeremy Hunt.
“Everyone understands that the government cannot do everything. How does the government do everything? It does this simply by borrowing money, which ultimately leads, as we have seen, to high inflation, loss of credibility and soaring interest rates,” he said. .
Among the measures Sunak and Hunt are considering to close the gap are a further two-year freeze on the Lifetime Retirement Allowance and the imposition of VAT on electric vehicles for the first time, the Daily Telegraph reported.
Sunak acknowledged that after Liz Truss’ calamitous tenure at No. 10, conservatives urgently needed to rebuild public trust.
He pointed to his own record as Chancellor – when he introduced the Covid furlough scheme – to explain why people should trust him when it comes to managing the economy.
“I fully recognize that confidence has been shaken over the past few weeks and months. I realize that trust is not given, trust is earned. My job is to win back people’s trust,” he said.
“The one thing people will take away from the summer – hopefully from my record as chancellor – I’m someone they can trust understands the economy. I’m someone they can trust. confidence, which will guide us through what will be tough economic times. I have a track record in that area.”
Apart from the fall statement, Sunak said the main issue that had been on his mind for the previous 48 hours had been the Channel immigration crisis.
He defended Home Secretary Suella Braverman’s controversial claim that the south coast was facing an ‘invasion’ of migrants – although he did not use the word himself.
“What Suella was doing was giving an idea of the scale of the challenge we face, which is serious and unprecedented. There is no easy overnight solution to this challenge. But people should know that I am very determined to fix it,” he said.
He also revealed he was at a TGI Friday’s in Teesside when he heard Truss was quitting.
He said: “In a way, I had moved on, I was thinking about what was to come next. I was stuck in there. But he said he felt he had a “responsibility and a duty” to stand up, after discussing it with his wife, Akshata Murty.
He also said he told Boris Johnson he would not stand on a joint ticket with him, saying: ‘I was very clear with him that I had strong support from my colleagues in parliament and I thought I was the best person to do the job.”