Sunak pledges further tax cut after inflation drops to two per cent

19 June 2024, 10:22 | Updated: 19 June 2024, 10:26

Rishi Sunak pledges tax cuts on LBC
Rishi Sunak pledges tax cuts on LBC. Picture: global

By StephenRigley

Rishi Sunak has pledged to cut taxes further after inflation fell to the Bank of England's target for the first time in nearly three years.

Listen to this article

Loading audio...

Rishi Sunak has pledged to cut taxes further after inflation fell to the Bank of England's target for the first time in nearly three years.

The latest official figures showed headline CPU dropping to two per cent in May, from 2.3 per cent in April, paving the way for interest rate cuts.

It marks the first time inflation has been at the BoE's goal since July 2021, before the cost-of-living crisis saw inflation shoot up – at one stage hitting levels not seen for 40 years.

The Prime Minister said that the drop in inflation meant any future Tory government would now be in a position to cut more taxes.

He told LBC that the last few years have been "tough for everybody" but his government "stuck to a plan"."It wasn't always easy, but we've got there."

“It is because of that economic stability that we have restored, which was my priority when I got this job, that we have now been able to start cutting people’s taxes.

“If I win this election, I want to keep doing more of that, cutting people’s taxes at every stage of their life.”

Sunak on Inflation

Read More: Sunak insists 'the only poll that matters is July 4' as he defends dire polling for Tories ahead of election

Read More: 'They can probably afford Labour's tax rises': Sunak brushes off billionaires abandoning Tories

Shadow chancellor Rachel Reeves said people were still “worse off” despite the decline.Services inflation, which has been highlighted as a potential hurdle to interest rate cuts, fell to 5.7pc in May, down from 5.9pc in April. 

However, this was less than the drop to 5.5pc that economists had predicted.

The Bank of England is not expected to begin cutting interest rates at its next meeting tomorrow and the latest data has seen traders reduce bets on a reduction in borrowing costs in August, although some economists still think it is a possibility.

Yesterday Keir Starmer refused to rule out a council tax rise. He dodged questions on whether council tax could rise, saying "it would be foolish to write five years worth of budgets."

He told LBC: "It would be foolish to write five years worth of budgets on air.

"There are some tax rises, we want to get rid of non dom loopholes, private equity loopholes, we want a better windfall taxes.

"None of our plans require a tax rise, they will be based on growth."

More Latest News

See more More Latest News

Peter Kay

Peter Kay halts London gig as he warns noisy fans they will be kicked out - weeks after 'Lisa Riley' heckler removed

In Netflix's Adolescence, Jamie Miller plays a 13-year-old accused of murder

Adolescence has landed at a time when macho-culture is rising - now more than ever, we need to change the narrative

Heathrow Airport is closed until at least midnight

When will Heathrow airport reopen?

She was suspended and an investigation has been launched

Female prison officer suspended from London jail after 'inappropriate relationship' with inmate

Troy Ramsundar was knifed to death in a street in Brixton

Victim of fatal stabbing in Brixton pictured as police urge witnesses to come forward

Jack Fincham leaving Basildon Crown Court, following an appeal hearing after he previously admitted to two counts of being in charge of a dangerously out of control dog, and he was jailed for six weeks

Love Island star Jack Fincham wins appeal against prison sentence after dog attack on runner

A police officer at the North Hyde electrical substation which caught fire, causing chaos at nearby Heathrow

'MI5 will be all over this': Security expert tells LBC Russian operatives could be behind Heathrow chaos

Exclusive
The scene in Brussels

British plane passenger in 'stand-off with Belgian police' after getting stranded in Brussels amid Heathrow closure

Marcin Majerkiewicz (left) has been found guilty of the murder of Stuart Everett (right)

Man, 42, found guilty of murder and dismemberment of pensioner whose body parts were dumped across Salford

Thousands of journeys have been affected

Heathrow Airport closed: What are your rights if your flight is cancelled and how can you claim compensation?

Tommy Robinson has lost a bid to bring a High Court challenge against the Government over his segregation in prison.

Tommy Robinson loses bid to challenge prison segregation

Exclusive
Stranded passengers at Heathrow Terminal 5 in London

Most prepared man in Britain? Passenger's fantastic journey to reach baby goddaughter in France as Heathrow closes

Exclusive
The scene in Brussels

'No idea where we can land', pilot tells passengers on diverted Heathrow flight as plane stranded in Belgium

Great British Energy's first major project will be to help public institutions save hundreds of millions on energy bills, Ed Miliband has said.

GB Energy to invest £200m in solar panels for hundreds of hospitals and schools as part of first major project

A general view of the scene following a major fire at an electrical substation at Heathrow on March 21

Heathrow closure: What we know so far, as airport set to stay shut all day after substation fire

The scene at St Leonard's

Explosive life-threatening chemicals found in seaside town as police declare 'emergency incident'