Chancellor says Government will ‘stick to its guns’ as UK inflation stays at 8.7%

21 June 2023, 07:15 | Updated: 21 June 2023, 12:52

Inflation has failed to drop in May
Inflation has failed to drop in May. Picture: Alamy

By Kit Heren

Chancellor Jeremy Hunt has said the Government will "stick to its guns" and insisted patience is needed for the Bank of England rate rises to curb inflation.

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As inflation remained at 8.7% in May, the same level as in April, despite hopes that it would fall, Mr Hunt said: "Today's figures strengthen the case for the Government to stick to its guns.

"No matter what the pressure from left, right or centre, we won't be pushed off course.

"Because if we are going to help families, if we are going to relieve the pressure on people with mortgages, on businesses, we need to squeeze every last drop of high inflation out of the economy."

"We know that there is enormous pressure for families' mortgages and it's a really big deal for family finances," he added.

"The one thing that would not help those families is to step in with short-term support that meant that inflation stayed higher for longer and those mortgage rates stay higher for longer.

"So, I'm meeting the mortgage lenders later this week to ask what else can be done to relieve pressure in very difficult times.

"But we won't do anything that means that high inflation stays around for longer because that is the root cause of the pressure."

The Office for National Statistics (ONS) said that the consumer price index measure of inflation stood at 8.7% in the year up to May, the same as the rate in April.

Air travel, recreational and cultural goods and services, and second-hand cars were among the items that saw the biggest price rises, according to the ONS.

Motor fuel was one of the groups of goods where prices dropped.

Prices for food and non-alcoholic drinks rose in May 2023 but by less than in May 2022

The Bank of England has hiked interest rates repeatedly in a bid to bring inflation down to 2%, with another rate rise expected on Thursday.

Jeremy Hunt
Jeremy Hunt. Picture: Alamy

Read more: UK’s inflation rate drops to 8.7%, down from over 10% in March - but food prices still surging at 19%

Read more: Inflation in UK to be highest in developed world this year, OECD says

The government has vowed to bring inflation down by half by the end of 2023.

Chancellor Jeremy Hunt said: "We know how much high inflation hurts families and businesses across the country, and our plan to halve the rate this year is the best way we can keep costs and interest rates down.

"We will not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy, while also providing targeted support with the cost of living."

Shadow chancellor Rachel Reeves said: "This Tory government can't get a grip of this problem because they are the problem.

"Thirteen years of the Tories and their disastrous mini-budget are damaging our economic security and leaving families worse off.

"Simply continuing on this Tory path of managed decline is not the summit of Labour's ambition.

"We need a more secure economy, more secure family finances and a plan to help us grab hold of the opportunities before us.

"With a relentless focus on the cost of living, our strong fiscal rules and our mission for growth, that is what a Labour government will bring."

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