Rishi Sunak warned pouring ‘fuel on the fire’ could create ‘misery for millions’ as he hit out at his Tory leadership rival’s plans.
04 August 2022
Rishi Sunak warned that Liz Truss’s economic strategy will damage the nation, saying that pouring “fuel on the fire” will cause “misery for millions”, after she insisted her tax cuts could avert the recession forecast by the Bank of England.
Ms Truss, the Foreign Secretary, used a televised debate to warn of “very, very difficult times” without “bold” action rather than her Tory leadership rival’s caution.
But Mr Sunak, a former chancellor, struck back with fears her vision “will make the situation worse”, on the day the Bank warned inflation could peak at 13.3% in October.
Interest rates were raised to the highest level in nearly three decades, from 1.25% to 1.75%, worsening the pain for mortgage holders, before the Bank predicted the economy will plunge into the longest recession since the financial crisis in 2008.
Mr Sunak told the Sky News debate: “We in the Conservative Party need to get real and fast – because the lights on the economy are flashing red and the route cause is inflation.
“I’m worried that Liz Truss’s plans will make the situation worse.”
He stressed a need to get a grip on runaway inflation before cutting taxes, adding: “But it all starts with not making the situation worse.
“Because if we just put fuel on the fire of this inflation spiral, all of us, all of you, are just going to end up with higher mortgage rates, savings and pensions that are eaten away, and misery for millions.”
The financial focus of the battle to succeed Boris Johnson as prime minister only intensified with the Bank’s warnings, with the contenders differing strategies already prominent as they try to win the Tory members who will select the winner.
Ms Truss reiterated her pledge to immediately reverse the national insurance increase, introduced by Mr Sunak when he was in No 11, as well as cut other taxes to prevent the job losses of a recession.
“What the Bank of England have said today is of course extremely worrying, but it is not inevitable,” she said.
“We can change the outcome and we can make it more likely that the economy grows.
“Now is the time to be bold, because if we don’t act now, we are headed for very, very difficult times,” added Ms Truss, who kicked off the debate ahead of a grilling of Mr Sunak.
