Sunak defends inflation reduction plans amid ‘mortgage catastrophe’ warning
Labour leader Sir Keir Starmer said homeowners faced paying £2,900 extra a year on repayments.
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Your support makes all the difference.Rishi Sunak claimed the Government is “on track to keep reducing” inflation, despite warnings that a “mortgage catastrophe” will hit millions of homeowners.
The Prime Minister acknowledged inflation is “putting pressure on family budgets” but argued his administration had taken “decisive action” to support people.
Labour leader Sir Keir Starmer, speaking as new figures showed inflation remained higher than expected, warned the Government is responsible for “economic vandalism” and homeowners face paying £2,900 extra a year on repayments.
Even now, as mortgages go through the roof, the Prime Minister is planning to wave through honours and peerages for those who caused misery for millions
The Consumer Prices Index inflation stayed at 8.7% in May, the same level as in April, despite experts forecasting a fall to 8.4%.
Speaking at Prime Minister’s Questions, Sir Keir said in his closing remarks: “After 13 years of economic failure across the country, people are paying the price of uncosted, reckless, damaging decisions by the Tory party.
“And even now, as mortgages go through the roof, the Prime Minister is planning to wave through honours and peerages for those who caused misery for millions.
“What does it say about this Government, that while working people are worrying about mortgage hikes, paying the bills, even repossessions, the Tory party is rewarding those guilty of economic vandalism?”
Mr Sunak said: “No amount of personal attacks and petty point-scoring can disguise the fact that (Sir Keir) does not have a plan for this country.
“He comes every week to make the same petty points. We are getting on and delivering for this country. Yes, inflation is a challenge, that’s why we are on track to keep reducing it.”
Sir Keir had earlier opened the pair’s exchanges by saying that one of Mr Sunak’s own MPs believes Britain is “facing a mortgage catastrophe”, asking in the Commons: “Does he agree with that?”
Mr Sunak replied: “It is also right that we do support those mortgages and this is why the absolute right economic priority is to halve inflation.
A long time before I had this job, I highlighted the importance of tackling inflation. It’s why I said it is never easy to root out inflation, but we will take the difficult and responsible decisions to do so
“Because inflation is what is driving interest rates up. Inflation is what erodes people’s savings and pushes up prices, and ultimately makes them poorer.
“This is why a long time before I had this job, I highlighted the importance of tackling inflation. It’s why I said it is never easy to root out inflation, but we will take the difficult and responsible decisions to do so.
“It’s an approach that the IMF (International Monetary Fund) has strongly endorsed.”
Sir Keir countered: “He knows very well the cause of the mortgage catastrophe – 13 years of economic failure and a Tory kamikaze budget which crashed the economy and put mortgages through the roof.
“So, will the Prime Minister tell us how much the Tory mortgage penalty is going to cost the average homeowner?”
Mr Sunak referred to the “global macroeconomic situation”, as he defended the steps taken by his Government to help people with the cost of living and mortgages.
After Sir Keir said homeowners are expected to pay an extra £2,900 a year, Mr Sunak replied: “Perhaps (he) could explain why interest rates are at similar levels in the US, in Canada, in Australia and New Zealand, why they’re at the highest level in Europe that they’ve been for two decades.
“That’s why it’s important that we have a plan to reduce inflation, but in contrast, what do we hear from (him)?”
Mr Sunak added: “He doesn’t have many policies, but the few that he does have all have the same thing in common, they’re dangerous, inflationary and working people would pay the price.”
Sir Keir went on to highlight the case of a police officer from Selby called James, whose mortgage payments are to increase by £400 a month.
He said: “That’s nearly £5,000. He told me this morning that they’ve decided to sell their house, to downsize and he’s just told his children they’re going to have to start sharing bedrooms.
“Why should James and his family pay the cost of the Prime Minister’s failure?”
Mr Sunak said he was showing “responsible economic leadership”, saying of Sir Keir: “His economic policies would make James’s situation worse and it’s not just me saying that.”
Sir Keir said: “James and his family will have been listening to that, Prime Minister, and their plight should keep them awake at night because over the next few years, 7.5 million people are going to be in the same boat – all paying the Tory mortgage penalty month after month after month.”
Sir Keir claimed repossessions are “already up 50%”, while Mr Sunak said mortgage arrears and repossessions are “running at a level today that is below when we entered the pandemic because of the actions that we’re taking”.
Sir Keir responded: “I am sure from the vantage point of his helicopter everything might look fine, but that’s not the lived experience of those on the ground.”