James Cleverly has insisted Kwasi Kwarteng’s disastrous mini-budget is not to blame for the UK’s economic woes.
But the foreign secretary was forced to admit “I’m not an economist” as he was grilled by Richard Madeley and Susanna Reid on Good Morning Britain.
Chancellor Jeremy Hunt has admitted that everyone in the UK will end up paying more tax as he tries to fill a £55 billion black hole in the public finances.
The independent Resolution Foundation last week calculated that the mini-budget - in which Kwarteng announced £45 billion-worth of unfunded tax cuts and which led to economic chaos - cost the UK £30 billion.
Richard Madeley asked Cleverly whether the “Horlicks” of a mini-budget was to blame for the tough measures Hunt will announce in Thursday’s autumn statement.
The foreign secretary replied: “No, the vast majority of the issues that we have to deal with are issues that are facing every single country in the world.
“Our interest rates are higher than any of us are used to, but they are still significantly lower than most of our international comparators.”
Asked by Susanna Reid about the Resolution Foundation’s findings, he said: “I don’t necessarily agree with those figures.
“I’m not an economist, but as foreign secretary what I’ve seen is that our interest rates, while higher than we’re used to, are significantly lower than most of our international competitors.
“Our inflation rates - again, higher than we would want and we’re looking to address inflation as a real priority - are significantly lower than many of our international comparators.
“So we do have tough decisions to make and the chancellor will have to make sure we balance the books.”
However, his comments fly in the face of analysis by the Bank of England, which showed that the cost of government borrowing spiked in the immediate aftermath of the mini-budget, and only started to come down again after the Bank made £65 billion available to bail out the UK pensions industry.
By contrast, the cost of government borrowing in America and the EU remained relatively flat while Britain’s financial markets went into meltdown.
The knock-on effect saw mortgage rates for homeowners go up, with the average cost of a two-year fixed rate deal reaching 6 per cent for the first time since 2008.