Hunt: inflation still ‘causing enormous pressure on families up and down the country’
The chancellor, Jeremy Hunt, has said inflation is “causing enormous pressure on families up and down the country” in a glossy promo video issued by the Treasury this morning.
In the clip, Hunt says: “There is absolutely no room for complacency in the battle against inflation. While it is welcome that the headline rate of inflation has fallen, we now know that we have to stick to the plan to bring down inflation because that is causing enormous pressure on families up and down the country.”
The video also features Andy Haldane, the former chief economist at the Bank of England, attempting to explain government policy.
Key events
As I mentioned in my preamble, I suspect we will not be getting much political activity in England for the next couple of hours as MPs try to avoid looking like they weren’t patriotically supporting the Lionesses attempting to reach their first world cup final. That feeling may not, one suspects, be uniformly distributed across the whole of the UK.
John McTernan writes for the Guardian today, calling for Labour to stop being so cautious and make the election a referendum on net zero:
Or nearly everything. Labour currently lacks one vital quality: confidence. While heading for a victory bigger than Tony Blair’s landslide of 1997, the party appears to be too frightened to fight. Whenever the Tories do something profoundly amoral or un-British – such as telling refugees to “fuck off”, as their vice-chair, Lee Anderson, recently did – Labour seems scared of going on the attack.
Labour’s caution is understandable. Not only was the 2019 general election Labour’s worst result in terms of seats since 1935, it was also its third election defeat in just four years. Keir Starmer has never stood in a parliamentary election that Labour has won. That is scarring because defeat eats the soul.
But excessive caution kills hope. And the next general election has to be about hope for two reasons. First, it is a change election. The polls tell us one big thing: voters want to see the back of the current government.
But change has to be to something, not merely away from the present. Which leads to the second point: progressive parties win when they own the future and fairness. This is why Labour’s focus on “getting rid of the barnacles”, the Australian strategist Lynton Crosby’s term for ditching unpopular policies and positions, is becoming a drag on it.
Read more here: John McTernan – Stop being so cautious Labour: make the election a referendum on net zero
Government yet to decide how to calculate train fare rises for England
The government has not yet decided how much rail fares in England will rise by next year, and faces “delicate difficult decisions”, treasury minister John Glen said on the morning media round.
Ministers announced on Tuesday that any increase will be below the rise in the retail prices index (RPI) measure of inflation for the 12 months to July, and come into effect in March rather than in January.
Asked on Wednesday morning how much rail fares will rise by, PA Media reports Glen told Sky News: “We have said that we will keep it below inflation. Obviously I will be working closely with Mark Harper, the secretary of state, on what mechanism to use.
“But there are tough decisions now around how to use his budget in a way that suits commuters and suits the economy as a whole, delicate difficult decisions. We have not come to the end of that discussion yet.”
The governments in Scotland and Wales are yet to announce their plans for next year’s rail price increases. Consumer groups have called for them to be held frozen.
Hunt: inflation still ‘causing enormous pressure on families up and down the country’
The chancellor, Jeremy Hunt, has said inflation is “causing enormous pressure on families up and down the country” in a glossy promo video issued by the Treasury this morning.
In the clip, Hunt says: “There is absolutely no room for complacency in the battle against inflation. While it is welcome that the headline rate of inflation has fallen, we now know that we have to stick to the plan to bring down inflation because that is causing enormous pressure on families up and down the country.”
The video also features Andy Haldane, the former chief economist at the Bank of England, attempting to explain government policy.
The ONS has issued its monthly bulletin on house prices – saying they have increased by 1.7% in the 12 months to June, slowing marginally from 1.8% in May.
The average UK house price was £288,000 in June, £5,000 higher than 12 months ago but £5,000 below the recent peak in November last year. The ONS states that median annual pay for full-time employees in the UK was £33,000 for the tax year ending on 5 April 2022.
The ONS has also issued its data on housing rental, which finds that private rental prices paid by tenants in the UK rose by 5.3% in the 12 months to July 2023.
Graeme Wearden will no doubt have more about that on our business blog.
Not unexpectedly, Rishi Sunak, has been bullish this morning in his messaging around the rate of inflation falling.
In a series of posts to social media, the prime minister is quoted as saying:
Inflation has fallen down to 6.8% in two months. It’s inflation that eats into your savings. It’s inflation that makes your money go less far. Halving it is my number one priority. As prime minister I am determined to build a better economy and a better country for you, your children and your grandchildren. That starts with tackling inflation. And the news this morning shows that the plan is working. If we stick to the plan I’ve set out, we’ll get it done.
Sunak listed five measures which he claimed were tackling inflation, which is far higher than the government’s stated 2% target. He cited responsible borrowing, tackling the causes of inflation, helping with cost of living, being on the side of consumers and making the UK the best place to invest and grow.
JUST IN: Inflation has fallen down to 6.8% in two months.
It’s inflation that eats into your savings.
It’s inflation that makes your money go less far.
Halving it is my number one priority. This is how we are getting it done👇🧵 pic.twitter.com/soDtROUd6e
— Rishi Sunak (@RishiSunak) August 16, 2023
It was notable, given the suggestion that he is lukewarm on policies that deliver on the government’s 2050 net zero target, that he specifically listed “backing oil and gas in the North Sea” as one of the ways his government was tackling inflation.
If you wander down to your newsagent later today, you will see that most papers have lead with the revelation that three Bulgarians suspected of spying for Russia have been arrested and charged in the UK.
The main exception is the Daily Express, who today have picked Brexit, immigration, house prices, aren’t woke youngsters awful, pensions from their lucky front page roulette wheel.
Rayner asserts she will remain deputy Labour leader and will be deputy PM
Aletha Adu
Political correspondent Aletha Adu reports:
Angela Rayner has asserted her position within Keir Starmer’s shadow cabinet, declaring “I will be deputy prime minister and I will be the deputy leader of the Labour party”, when asked if she had “lost her nerve” in fighting for issues including the two-child benefit cap and free school meals.
“We’re not going to have the funding in the first period to do that the Labour government wants to do. That doesn’t mean to say, however, that we wouldn’t do things differently and people wouldn’t see the difference like the energy bills”, she told BBC’s Radio 4 Today programme.
Defending the policy changes Starmer has made since becoming party leader, she repeated the party line that “the Tories have crashed the economy, when we took over the pandemic was in full swing, and we have the war in Ukraine, there is a very different context to where we are now. What we’re saying is our values remain exactly the same.”
Rejecting suggestions that many of Labour’s offerings are similar to that of the Conservatives, she added: “Our manifesto that we put forward wil be different to what the conservatives have offered and it will be changed for the country.”
On her relationship with Starmer, she reminded the public of her own mandate: “I often talk about it as an arranged marriage. We were both elected by the membership differently and independently. And we’ve worked constructively together. We need a Labour government and we need that change in this country.”
Rayner: inflation fall is a ‘relief’ but ‘we didn’t have to be here’
The deputy Labour leader, Angela Rayner, has called the fall in inflation a “relief”, but said “we didn’t have to be here”, blaming the Tory government for crashing the economy and not providing growth.
She told BBC Radio 4’s Today programme: “Well, it’s a relief for a lot of people, but it, of course, still means that there’s a cost of living (crisis) and prices are still going up but at a slower rate.
“We’ve seen families see their bills going up significantly – over £300 a month – and it has been really difficult for people over the last couple of years, and we’ve had 13 years of economic chaos by the Conservatives.
“However, people have been put through hell and back and they’re still going to be facing this cost-of-living crisis for some time to come.”
She added: “The frustration for us in Labour is that we didn’t have to be here.
“The Tories crashed the economy, they haven’t provided us with an economy that has been growing, we’ve had a decade of low growth, low pay and high taxes.
“It’s the Tories that have put us in this situation and, while it’s a relief that we’re not going any higher than what we have, many families up and down the country at the moment are … finding things difficult. They can’t meet their monthly payments.”
Boost for Sunak as inflation falls to lowest in 17 months
There was good news on the economy for Rishi Sunak as inflation slowed to its lowest for 17 months.
At 6.8% in July, however, it was still well above the Bank of England’s target of 2%.
The chancellor, Jeremy Hunt, said, PA Media reports, the easing of inflation showed “the decisive action we’ve taken to tackle inflation is working” but “we’re not at the finish line”.
“We must stick to our plan to halve inflation this year and get it back to the 2% target as soon as possible,” he added.
As a reminder, here are the five key priorities that Sunak announced for his government in January of this year:
We will halve inflation this year to ease the cost of living and give people financial security.
We will grow the economy, creating better-paid jobs and opportunity right across the country.
We will make sure our national debt is falling so that we can secure the future of public services.
NHS waiting lists will fall and people will get the care they need more quickly.
We will pass new laws to stop small boats, making sure that if you come to this country illegally, you are detained and swiftly removed.
Welcome and opening summary
Good morning, and welcome to the politics live blog for Wednesday. Here are your headlines:
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A big boost for Rishi Sunak as the UK’s annual inflation rate fell sharply to 6.8% in July, down from 7.9% in June, as the drop in energy prices over the past year led to the smallest increase in the cost of living since February 2022. Halving inflation is one of Sunak’s five policy planks.
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It is still “NHS week” on the government’s media grid, and the latest suggestion is that patients with cancer symptoms could bypass their GP in the future and go straight for a scan. The health secretary, Steve Barclay, made the suggestion in the latest attempt by the government to suggest it is trying to get a grip on record NHS waiting lists in England.
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Car culture war latest: London councils are having to spend hundreds of thousands of pounds of taxpayers’ money repairing vandalised bollards and cameras in low-traffic neighbourhoods.
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Three Bulgarian nationals suspected of spying for Russia while living in the UK were arrested and charged yesterday.
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Charities have warned thousands of refugees and survivors of trafficking could find themselves homeless after a Home Office policy change. Until last month, newly recognised refugees and survivors of trafficking had 28 days to find alternative accommodation after receiving a “notice to quit” before being evicted from Home Office accommodation they had lived in while officials were processing their claims – but this has now been reduced to a minimum of seven days.
There is very little in the diary today. I suspect most English politicians will be looking to maintain a dignified patriotic silence from 11am so it looks like they are watching the England–Australia world cup semi-final. Hopefully the right match, unlike Baranaby Joyce.
I’m Martin Belam, and I will be with you today. You can reach me at [email protected].
