Expect inflation blip but our plan is working, says Jeremy Hunt
Chancellor Jeremy Hunt has said there may be a “blip” in inflation in September.
His concession comes despite his insistence that the government’s plan to reduce inflation is working.
Inflation as measured by the consumer price index (CPI) has eased to 6.8% from a peak of 11.1% last October, but is still far from the Bank of England’s 2% target.
August’s inflation figures are due to be published by the Office for National Statistics in September.
Hunt told the BBC’s Sunday With Laura Kuenssberg: “The plan is working, inflation is coming down.”
But put to him that inflation could have risen in August, he said: “I do think we may see a blip in inflation in September. But after that the Bank of England is saying it will fall down to around 5%.
“And you know, if we are going to put money in people’s pockets quickly, the fastest thing I can do is to deliver the prime minister’s pledge to halve inflation, because that puts not 1p in the pound, which might be a tax cut, but 5p in the pound in people’s pockets that they wouldn’t have had if inflation stays high.”
Rishi Sunak pledged to halve inflation this year, and would need the figure to hit about 5.3% to meet his pledge.
Asked about the prospect of cutting taxes when he delivers his autumn statement , the chancellor said there is “nothing” he wants more than to bring the “tax burden” down, saying one way to do so is to grow the economy and “good progress” is being made on that.
Hunt said the second way to do so is to “spend taxpayers’ money more efficiently”. He said he has written to secretaries of state on Sunday to ask about how much time public servants are spending on “unnecessary admin”.
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He said: “What we need to do now is to restart the public service reform agenda. It’s not about asking to work harder. They work very, very hard. But it’s about using money more efficiently.”
But speaking to Sky News, Hunt said the reform agenda would not involve “more cuts”. He also denied that he would have made different decisions in his role as chancellor had he known the UK economy had bounced back from the pandemic faster than expected.
The Liberal Democrats’ Treasury spokesperson, Sarah Olney, said: “It is an insult to the British people that the chancellor describes people’s weekly food shops and bills going up as just a ‘blip’. The Conservatives simply don’t get it and have completely failed to get a grip of spiralling bills.”