The Chancellor has told the cabinet that interest rates are expected to increase to 2.5 per cent over the next year as he warned ministers against borrowing more to fund public spending. He warned that a 1 percentage point increase on a typical mortgage would result in an extra £700 for those not on fixed-rate deals.
Mr Sunak, who is facing pressure from Tory MPs to ease pressure on people during the cost of living crisis, was quizzed yesterday by Mumsnet about how someone in his position can empathise with hard-up Britons.
He cited his grandparents who emigrated to the UK “with very little”, adding: “Of course now I’m in a fortunate position but I didn’t start like that, that’s not how my family started.”
He said that his achievements were “a result of so many people’s kindness, hard work, sacrifice throughout my life”, citing his grandparents arriving in Britain with very little.
He added: “I never forget the values that I was raised with, and actually what I then try and do is express those values through the work I do in this job.”
But he provoked a fresh row after he argued it would be “silly” to offer families further help with soaring energy bills right now, despite forecasters predicting rises of as much as 40 per cent in October, equating to nearly £3,000 a year.
He defended himself against charges that he is too rich to understand people’s struggles with the cost of living in the wake of a row about his wife’s non-domiciled tax status.
He said: “Judge me on my actions.
“I don’t judge people by how much money they have in their bank account, I look at their character, their values and how they’re acting.”
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He said the money saved on a £54.85 test was “a drop in the ocean” for drivers.
Mr Shapps told the committee that “cars have clearly become a lot more reliable than when the MoT, named after the Ministry of Transport, was put in place”, but said that a “very rigorous safety standard” would have to be met to make a change.
Anne-Marie Trevelyan, the international trade secretary, poured cold water on a plan to cut tariffs on imported food, saying it would have a tiny impact on bills.
She told MPs on the international trade committee that unilateral reductions in tariffs would reduce leverage on other countries to reduce their own in trade negotiations.
Ms Trevelyan is said to have been unaware of a plan floated by Jacob Rees-Mogg, the Brexit opportunities minister, and told MPs that while “all of us across every department are very focused on thinking about . . . where we can find ways to reduce costs”, the plan was mired in legal complexities over World Trade Organisation rules.