London, June 22 (.). – The UK government will continue “firmly on its way” to bring down year-on-year inflation in the country – by 8.7% – as confirmed by its Prime Minister, Rishi Sunak, this Thursday ahead of the latest half-point rate hike to 5% announced by the Bank of England.
Appearing at a conference of chief executives, the Tory leader referred to the 13th hike by the issuing bank and said that “the reason prices are so high is because inflation is too high and there is less to go down”.
“That’s something that makes everybody poorer, that’s what inflation does. That’s why we have to tackle it, we have to get it down, and interest rates are part of all of that,” he explained.
Sunak noted that he had always warned that “this will be difficult, and it has obviously become more difficult in recent months, but it is important to do it.”
“The government will remain firm and will continue its plan to do so (lower inflation),” he stressed.
The Bank chose to raise interest rates again as a result of the disappointing – worse than expected by analysts – data for year-on-year inflation, which held at 8.7% in May, the same as in April, but still “historically high” levels it revealed. Reported yesterday by the Office for National Statistics (ONS).
After announcing the increase, Bank of England Governor Andrew Bailey said today that the entity is “committed” to bringing inflation in the country down to the 2% target.
He said that if no action is taken now, the situation “will get worse later.”
The governor justified “raising the rates to 5% after the recent economic data, which shows the need to take more measures to reduce inflation.”
He also acknowledged that the situation would be “difficult” for “many people who have mortgages or loans, who will be understandably concerned about what that entails.”
Following the bank’s announcement, the head of economics, Jeremy Hunt, noted in a statement that the government had an “unquestionable determination” to bring down inflation, “because it is the only way in the long term to relieve pressure on households suffering from underinflated mortgages”.
Criticism from the opposition and trade unions
The announcement has not been well received by the opposition and unions, who are worried above all about the impact on citizens through mortgages and loans.
“British families will be very concerned about what this increase will mean for them,” said Rachel Reeves, who is in charge of finance for the Labor Party.
In a statement, Reeves criticized the government that, instead of offering “support” to citizens, “both the head of the economy, Jeremy Hunt, and the chief executive, Rishi Sunak, will bury their heads in the sand without cleaning up the disaster this Conservative government has created.”
Along these lines, the general secretary of the TUC union federation, Paul Novak, considered the increase to be “the result of a dangerous way of thinking in the Bank of England and Downing Street, raising rates so high that the economy is forced into recession. It will only exacerbate the current crisis at the expense of citizens’ jobs and homes.” “.
Unite chairman Sharon Graham lamented that the bank had “made the wrong decision, hurting ordinary British households by raising interest rates”.
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