The government is doing all it can to combat a surge in prices, Chancellor Rishi Sunak said today (22) as soaring food prices pushed consumer price inflation to a 40-year high of 9.1 percent last month, the highest rate out of the Group of Seven countries.
Records from the Office for National Statistics show May’s inflation was the highest since March 1982 – and worse is likely to come.
Reacting to the figures, Sunak said that the government was doing all it could to combat a surge in prices and the central bank would act “forcefully” to contain inflation.
“We are using all the tools at our disposal to bring inflation down and combat rising prices,” Sunak said.
“We can build a stronger economy through independent monetary policy, responsible fiscal policy which doesn’t add to inflationary pressures, and by boosting our long-term productivity and growth.”
Sunak added that the Bank of England will “act forcefully” to combat rising prices.
“I want people to be reassured that we have all the tools we need and the determination to reduce inflation and bring it back down,” Sunak told reporters.
He added that the government would be responsible with borrowing and debt, and work to improve productivity.
Earlier today (22), thinktank Resolution Foundation said the cost-of-living hit for households was being compounded by Brexit, with damaging long-term implications for productivity and wages.
The report, which was written by London School of Economics associate professor Swati Dhingra – who will join the Bank of England’s Monetary Policy Committee in August – and researchers from the Resolution Foundation think tank, states that Britain is becoming a more closed economy due to Brexit, with damaging long-term implications for productivity and wages which will leave the average worker 470 pounds a year poorer by the end of the decade.