Rishi Sunak has said there is a “deep moral responsibility” to get inflation under control as the cost-of-living remains stubbornly high.
The prime minister’s characterisation came as official data on Wednesday showed inflation defied expectations that it would slow and held at 8.7% in May – making the rate of price growth in Britain the highest of any major economy once again.
It means the Bank of England is likely to hike interest rates again on Thursday in a desperate attempt to cool the economy down, spelling bad news for homeowners who face further increases in mortgage repayments. The central bank’s over-arching aim is to keep inflation at 2%.
Sunak vowed in January that the government would halve the rate at which prices are rising by the end of the year. At the time, the inflation rate was around 10%.
Speaking at an event on Thursday, Sunak will put an added emphasis on the goal.
He is expected to say: “I feel a deep moral responsibility to make sure the money you earn holds its value.
“That’s why our number one priority is to halve inflation this year and get back to the target of 2%.
“And I’m completely confident that if we hold our nerve, we can do so.”
His comments suggest lowering inflation now trumps economic growth – one of Sunak’s other promises – which could have other negative economic impacts.
Acknowledging that this is a difficult time for families and businesses, the prime minister will add: “Beating inflation has to be the priority … because if we don’t get a grip on inflation now, the damage will be worse and longer lasting.”