Britons will feel better off next year, Rishi Sunak has said as he pledged to tame inflation by maintaining “discipline” on public spending and tax.
In an interview with The Times, the prime minister said that he “passionately believes” that he can bring down inflation and revive economic growth.
He said that he was “really optimistic” about the future and “confident” that inflation would fall enough to ease the cost of living crisis next year.
Inflation fell from 7.9% to 6.8% last month, according to official figures published on Wednesday. Wages are now higher than inflation for the first time since September 2021 amid signs that the cost of living crisis may be beginning to ease.
Asked if people will feel better off in a year’s time, Mr Sunak said: “That’s my job, to make sure that not just happens but they feel that that’s happening. You can start to see now that there is a prospect of wages growing faster than inflation going forward.
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“We’ve got a challenge right now to overcome but I’m entirely confident we will do it. Is it taking a bit longer than anyone would like? Of course it is, but we’re making progress.
“The last couple of months show that the plan is working. We’re making progress. I believe if we stick to it we will get to that point where people see inflation has come down, that they do feel better off. I’m confident we will.”
However, he rejected calls by some Tory MPs to cut taxes now, warning that unfunded borrowing would only exacerbate inflation.
“Right now the best thing for the country is to bring down inflation,” he said. “That means being disciplined on borrowing, disciplined on spending, whether that is spending on lots of things — public sector pay — or indeed unfunded tax cuts. All of that is part of being disciplined with the nation’s finances.”
However, The Institute for Fiscal Studies (IFS) think tank warned that Sunak’s pledge to halve inflation by the end of the year could be in jeopardy.