Hunt says driving down inflation ‘will put more cash into your pockets’
Jeremy Hunt discusses tackling problems with inflation
Driving down inflation puts more money in pockets than cutting taxes, Jeremy Hunt has insisted.
The Chancellor said that tackling runaway price rises is the “number one focus” for the Government and will help boost economic prosperity.
Mr Hunt said in a City of London speech on Monday night the worst could be over as food and energy prices fall.
Inflation eased to 8.7 percent in May but still remains stubbornly high.
One of Rishi Sunak’s five key priorities is to halve inflation by December. It was at 10.7 percent when he made the pledge.
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Mr Hunt said the Government and the Bank of England will do what is “necessary” to bring inflation back to the two percent target.
In his Mansion House speech, the Chancellor said: “With wholesale food and energy prices falling, fiscal and monetary policy pulling in the same direction and a government that puts bringing down inflation at the heart of everything we do, we will overcome these challenges.
“Working with the Governor and the Bank of England, we will do what is necessary to tackle inflation persistence and bring it back to the two percent target.
“Delivering sound money is the Government’s number one focus. That means taking responsible decisions on public finances, including public sector pay, because more borrowing is itself inflationary. It means recognising that bringing down inflation puts more money into people’s pockets than any tax cut.
“There can be no sustainable growth without eliminating the inflation that deters investment and erodes consumer confidence.”
Mr Hunt insisted tackling inflation unlocks Rishi Sunak’s two other two economic priorities – growing the economy and reducing debt.
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He promised “evolutionary not revolutionary” reforms to get pension funds making billions of pounds of riskier investments in fast-growing firms to boost economic growth.
He welcomed an agreement with leading pensions firms to put five percent of their investments, a sum of up to £50billion, into high-growth businesses. Aviva, Legal & General and Phoenix Group are among those understood to be taking part.
Shevaun Haviland, British Chambers of Commerce director general, said: “Boosting investment is key to remaining globally competitive, increasing economic growth and strengthening UK capital markets. We very much welcome the proposals set out by the Chancellor in his Mansion House reforms, making it clear that the UK is where business belongs.”
Meanwhile, Bank of England Governor Andrew Bailey said in his Mansion House speech it is “crucial that we see the job through” to quickly bring down inflation.
He said inflation will fall “markedly” over the rest of the year.
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