Sunak scorns Truss’s claims that tax cuts can avert recession
Liz Truss has claimed her tax cut plans could avert the looming recession, after the Bank of England forecast 13% inflation and a downturn lasting more than a year.
In a televised leadership interview, the foreign secretary was challenged about gloomy projections made by the Bank on Thursday, as it increased interest rates by 0.5 percentage points.
“What the Bank of England has 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.”
Truss and her Conservative leadership rival, Rishi Sunak, were each grilled by a studio audience made up of Conservative members, and Sky News presenter Kay Burley.
Sunak, who appeared after Truss, stepped up his criticisms of her £30bn plan for unfunded tax cuts, claiming it would lead to “misery for millions”.
“The lights on the economy are flashing red, and the root cause is inflation. I’m worried that Liz Truss’s plans will make the situation worse,” he said.
“If we just put fuel on the fire of this inflation spiral, all of us, all of you, are going to just end up with higher mortgage rates, savings and pensions that are eaten away, and misery for millions.”
But Truss insisted that “now is the time to be bold, because if we don’t act now, we are headed for very, very difficult times”, reiterating her policies of reversing the recent increase in national insurance contributions and halting planned increases in corporation tax.
Asked what more she would do to deal with rocketing energy prices, Truss cited her existing policy of temporarily halting green levies that add about £150 to household bills.
Truss rejected the idea of a windfall tax on the bumper profits of energy companies.
Read more on theguardian.com
