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Every time Sunak and Hunt said they had nothing to do with interest rates

Rishi Sunak has said that a vote for the Conservative Party at the upcoming general election is a vote for interest rate cuts due to his successful attempts to slash inflation.

Mr Sunak made the pledge just over a week after he called the general election on the same day that it was announced that inflation had fallen close to target levels.

Asked by The Times if voting for his party would ensure interest rates would begin to fall, he said: “Of course it is, because we are the party who has committed to bringing down inflation, which is a necessary condition for bringing down interest rates.

“And I think people can see we have delivered that. And that allows us to think about the future in a more positive and confident way.”

The promise is a marked departure from the previous language used by the Government when discussing interest rates, with ministers repeatedly pointing to global factors and the Bank of England’s operational independence in deciding rate cuts.

Inflation fell to 2.3 per cent in April – the lowest level in three years and close to the target level of 2 per cent – which has led many to predict that the Bank of England may announce a cut to interest rates in the coming months.

The base interest rates, meanwhile, have been held at 5.25 – the highest rate in over 30 years – by the Bank since August 2023 in a bid to dampen the high levels of inflation, but recent figures suggest that this trend could be coming to an end.

The decision on whether to raise or cut interest rates has rested solely with the Bank of England’s Monetary Policy Committee (MPC) since 1998 when the newly-elected Labour government granted it operational independence over monetary policy.

Here are all the times that the Prime Minister, the Chancellor, and other ministers have suggested that interest rates have nothing to do with them and must be decided by the Bank of England in contrast to Mr Sunak’s latest remarks.

17 October 2022

In a statement to the Commons made shortly after he was appointed Chancellor in the final weeks of Liz Truss’s short-lived Government, Jeremy Hunt said: “It is not for the Government to say what the Bank of England does when the Monetary Policy Committee makes its decision on interest rates.”

He added that he had held conversations with the Andrew Bailey, Governor of the Bank of England, to understand what it “needs to hear for it to feel that the inflationary pressures will be lower and so it will not have to make as high an increase as some people are predicting.”

FILE PHOTO: British Prime Minister Rishi Sunak, alongside Chancellor of the Exchequer Jeremy Hunt holds his first Cabinet meeting in Downing street, London, Britain October 26, 2022. Stefan Rousseau/Pool via REUTERS/File Photo
Rishi Sunak and Jeremy Hunt are leading the UK’s battle against inflation (Photo: Reuters)

3 November 2022

In a statement issued shortly after the Bank of England announced it was raising interest rates by a historic 0.75 percentage points in November 2022, Mr Hunt said the Government’s only role in keeping interest rates low was by ensuring “stability”.

He said: “The most important thing the British government can do right now is to restore stability, sort out our public finances, and get debt falling so that interest rate rises are kept as low as possible.”

17 November 2022

At Mr Hunt’s first Autumn Statement, and the first following Mr Sunak’s election as Prime Minister, the Chancellor told MPs that much of the credit in reducing inflation fell to the Bank of England.

He said: “The Bank of England, which has done an outstanding job since its independence, now has my wholehearted support in its mission to defeat inflation and I today confirm we will not change its remit.”

14 June 2023

Speaking to BBC News last year, the Chancellor said the UK has no other option than to raise interest rates to bring down inflation, adding: “We have to do everything we can as a government, as a country, to support the Bank of England in their mission to squeeze inflation out of the system.”

British Chancellor of the Exchequer Jeremy Hunt reacts with Prime Minister Rishi Sunak during a session of the Financial Statement and Budget Report at the House of Commons in London, Britain, March 6, 2024. UK Parliament/Maria Unger/Handout via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT. IMAGE MUST NOT BE ALTERED. REFILE - CORRECTING DATE FROM "NOVEMBER 22, 2023" TO "MARCH 6, 2024".
Jeremy Hunt with Rishi Sunak during a session of the Financial Statement and Budget Report at the House of Commons (Photo: Maria Unger/Reuters)

21 June 2023

In response to a question from Stephen Flynn about the economy, Mr Sunak told MPs at Prime Minister’s Questions that rising interest rates were a “global problem”, before suggesting that his Government only had an impact on lowering inflation.

He said: “Interest rates in this country are at similar levels to those in America, Canada, Australia and New Zealand. The rise in inflation and interest rates is a global phenomenon.

“But that is why, early, I set out that bringing inflation down was the right economic priority to have. That is what this Government will do, but that requires difficult and responsible decisions.

26 June 2023

In a Commons statement made shortly after interest rates went above 5 per cent for the first time in decades, Mr Hunt told MPs that the UK was “like other countries” in feeling the effects of high inflation.

“We are steadfast in our support for the independent Monetary Policy Committee as it takes whatever action is necessary to return inflation to the 2 per cent target in the medium term,” he said.

“As interest rates rise, I will not take action that undermines the Bank of England’s monetary objectives, but where we can take non-inflationary measures to relieve the anxiety faced by families, we will do so.”

5 July 2023

Speaking at Prime Minister’s Questions, Oliver Dowden, Mr Sunak’s Deputy Prime Minister who was standing in for him, told MPs that he supports “the independence of the Bank of England in taking the necessary measures to control inflation” as interest rates remained at five per cent.

12 July 2023

Mr Dowden also stood in for Mr Sunak the following week at Prime Minister’s Questions, when he told MPs that high interest rates were driven by global factors.

Responding to the SNP’s Mhairi Black, he said: “People around the world know that the driver of higher mortgage rates is higher inflation, and higher inflation is caused by Russia’s invasion of Ukraine and by the post-Covid supply chains.

“What we have to do is make sure that we halve inflation. It is only by getting inflation under control that we will be able to get mortgage rates down, and that requires discipline—discipline on spending, on public sector pay and on energy supply.”

5 September 2023

In a Commons statement, Treasury minister Andrew Griffith also suggested that high interest rates were being driven by global factors out of the control of the Government.

He told MPs: “Over the course of 2022, high inflation from Putin’s illegal invasion of Ukraine saw interest rates increase across most western economies.

“The path to lower rates is through low inflation, which is why the Prime Minister made halving inflation one of our five priorities for this year. I am pleased that the latest Bank of England forecast shows that we are on track.”

25 October 2023

Speaking at Prime Minister’s Questions, Mr Sunak told Labour leader Sir Keir Starmer that his party was not responsible for rising inflation and interest rates as they were a “global challenge”.

He said: “He is still ignoring the fact that rising interest rates are a global challenge. They are at their highest level in America and Europe for more than 20 or 30 years. Mortgage rates have doubled in America and trebled in Europe.”

14 November 2023

In a Commons statement, Treasury minister Bim Afolami told MPs that the Government was “doing what we can” but that high inflation and interest rates were again, a “global phenomenon”.

He said: “The reason why we are in this position is that there is a global phenomenon. We are doing what we can. We are working closely with the Bank of England and, over time, due to the policies of the Chancellor, the Prime Minister and this Government, interest rates will come down.”

21 November 2023

Mr Hunt used his second Autumn Statement to suggest that the Government needed to be “responsible” with public finances in order to help the Bank of England reduce inflation after interest rates rose to 5.25 per cent.

He said: “We met our pledge to halve inflation, but we must keep on supporting the Bank of England to drive inflation down to 2 per cent. That means being responsible with the nation’s finances.”

19 March 2024

Asked in the House of Commons whether he wanted the Bank of England to cut rates, Mr Hunt stressed the independence of the institution.

He said: “Chancellors never comment on decisions made by the Bank of England on interest rates. But what I can say is that the Office for Budget Responsibility predicted at the Budget that inflation would fall to around target in the next few months, and that gives the best possible prospect of interest rates starting to fall.”

22 May 2024

Treasury minister Mr Afolami also referenced the independence of the Bank of England when asked about interest rates last week just hours before the general election was called.

He told MPs: “It is for the Monetary Policy Committee of the Bank of England to determine the policy on interest rates, but we hope that working in partnership with the Bank of England to cut inflation will mean that at some point later in the year interest rates will start to come down, as the IMF has suggested, as a result of inflation being at target.”

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