Rishi Sunak has vowed to limit the impact of rising inflation on people with mortgages as he vowed to restore confidence in the government.
The prime minister said inflation was “enemy number one” and he was doing everything he could to “get hold” of the problem.
Sunak told the Times he understood the concerns of families now facing crippling rises in their monthly mortgage bills, after the Bank of England raised key interest rates by 0.75 percentage points to 3 %, its highest level in 15 years.
“I absolutely 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 will do absolutely everything I can to deal with this problem, to limit the increase in these mortgage rates.
“I think inflation is the number one enemy, as Margaret Thatcher rightly said. Inflation has the biggest impact on those on the lowest incomes. I want to control inflation.”
The Bank of England was forced to raise interest rates to curb rising prices and warned on Thursday that the country was facing its longest recession in a century.
With an estimated £50bn black hole in the public finances, Sunak said it was important the government was honest with voters about the “trade-offs” the country faced in the next Chancellor’s Autumn Statement Jeremy Hunt.
“Everyone appreciates that the government cannot do everything. How does the whole government do it? It just does that by borrowing money, which ultimately leads to, as we’ve seen, high inflation, loss of credibility, high interest rates,” he said.
Among the measures Sunak and Hunt are considering to tackle the shortfall are a further two-year freeze on the lifetime pension and the imposition of VAT on electric vehicles for the first time, the Daily Telegraph reported.
Sunak acknowledged that after Liz Truss’s calamitous tenure in No 10, the Tories urgently needed to rebuild public trust.
He pointed to his own record as chancellor, when he introduced the Covid leave regime, as why people should trust him to run the economy.
“I fully recognize that trust has been damaged over the last few weeks and months. I understand that trust is not given, trust is earned. My job is to restore people’s trust,” he said.
“The one thing that people will take away from the summer, I hope from my track record as chancellor, is that I am someone they can trust who understands the economy. I am someone they can have confidence in, who will manage us in the that it’s going to be a tough economic time. I have a track record of doing that.”
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Apart from the autumn statement, Sunak said the main issue that had worried him over the previous 48 hours had been the immigration crisis in the Channel.
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 conveying a sense 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 committed to addressing it,” he said.
He also revealed he was in a TGI Friday’s in Teesside when he heard Truss was quitting.
He said: “In a sense I had moved on, I was thinking about what was next for me. I got caught up in that.” 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 be running on a joint ticket with him, saying: “I was very clear with him that he had strong support from colleagues in parliament and I thought he was the best person to do the job.”