Main events
the Center for Policy Studies, a conservative thinktank, criticized Labour’s plan to require lenders to offer mortgage holders the chance to switch to interest-only mortgages, or to extend the term of the loan. In a statement Tom Clougherty, CPS’s director of research, said:
Labour’s plan mostly “requires” lenders to do various things they already do voluntarily, because they understand the pressures their customers face and don’t want people to lose out. in their houses which is inevitable.
But direct intervention of this kind can still have many unintended consequences. To the extent that it forces banks to offer more cross-subsidies to particular customers, it must raise costs for other borrowers – or prevent the necessary changes in the mortgage market from occurring.
It is better to leave the banks to settle matters with borrowers. A legislative, one-size-fits-all approach is bound to cause more problems than it can solve.
When Rachel Reeves, the shadow chancellor, asked what Labor will do to fight inflation, he told the Today program this morning that his priority was to help those who are struggling the most. He said:
My priority with the inflation we are currently experiencing is to provide immediate support to those who are struggling so much.
That’s why we’re extending the windfall tax, that’s why we designed this credit plan, the best thing the government can do, and what I’ll do as chancellor, is to provide economic stability and not undermine independent institutions. in the economy.
One of the reasons we are in this mess is because of the conservative mini-budget but also because, at the time, it undermined the independent Office for Budget Responsibility, the independent Bank of England, and the removal of the permanent secretary of the Treasury.
I will respect those economic institutions that provide the economic stability that is ultimately essential for low and stable inflation and a growing economy all of which we have not had in the last 13 years under the Conservatives .
Matt Hancock, the former health secretary, and Nicola Sturgeon, the former Scottish first minister, are among the witnesses who will give evidence at the Covid inquiry next week, it was announced this morning. Hancock will appear on Tuesday morning and Sturgeon on Thursday morning.
Rachel Reeves says Labor won’t pay subsidy to people struggling with high mortgage costs
Rachel Reeves, the shadow chancellor, rejected Labor’s support plans for subsidies or financial support for mortgage holders, as struggling homeowners braced for another interest rate hike, reports PA Media. PA says:
The Bank of England is widely expected to raise interest rates for the 13th time in a row but the shadow chancellor rejected calls from some quarters for direct financial help for hard-hit home owners. to increase rates.
Banks will instead be forced to help mortgage holders struggling to make payments under Labor’s plans, with the opposition urging the government to force lenders to allow borrowers to temporarily defer payments. interest only or extend their loan period.
Banks must also wait at least six months before starting recovery processes as part of the party’s five-point plan amid growing pressure on the government to address the crisis.
The Liberal Democrats have called for an emergency mortgage protection fund paid for by revising tax cuts for big banks but Reeves warned that such measures would worsen the financial situation.
“I recognize the challenge of inflation, and a large fiscal injection of cash into the economy, especially an untargeted injection, is not the right way,” Reeves told BBC Radio 4’s Today program.
Kiran Stacey there’s more to Labour’s plans to help people cope with higher debt payments here.
Foreign secretary James Cleverly struggled to explain what the government was doing to reduce inflation.
Good morning. At noon the Bank of England is expected to raise interest rates for the 13th time in a row. Economists had predicted an increase of at least a quarter of a percentage point, from 4.5% to 4.75%, but some of them believed there was a chance of a half-point increase, bringing the rate to 5%. , the highest level since April. 2008.
Graeme Worthen covered the construction of this decision in detail on his live business blog.
Rishi Sunak and Keir Starmer are both speaking publicly today, and they will be forced to explain what they will do to tackle inflation. It remains stubbornly high, and that explains why the Bank continues to keep the interest pedal. They hope they can do a better job than that James Cleverlythe foreign secretary, who struggled in an interview this morning to explain what the PM is doing to halve inflation (one of his five promises).
It was asked Amol Rajan in the program Now what is the plan, wisely Started by talking about Ukraine, which was part of his brief, and said that resolving the conflict would lower energy prices. He also talked about making the economy more productive, and creating more apprenticeships. Not impressed with the waffle, Rajan returned the question to him. This is how the exchange works. It hurts to hear.,
AR: The things you are talking about are not about core inflation. If you look at core inflation, it’s very clear … that the UK has a bigger inflation problem than other countries. And if you remove the things that you’re talking about, which are volatile, like food and energy prices, core inflation in this country is different from other countries. It’s going up. I just want to know what is the chief minister’s plan in this regard. Because influencing apprenticeships doesn’t really affect inflation in the short term.
JC: Look, we know you have to deal with things in the short, medium and long term.
AR: So what is the plan in the short term to reduce inflation from the prime minister?
JC: As I said, the point is, in things like lowering the implications of food and fuel …
AR: I asked you about core inflation … The prime minister said that cutting inflation is a top priority. What is the prime minister’s short term plan for reducing inflation?
JC: One of the main vehicles for the short-term response to inflation is interest rates…
AR: The prime minister cannot control that. So what will he do?
JC: The point is, not all the levers of control are in the hands of the government … We set inflation targets for the Bank of England, the Bank of England sets interest rates in response to those inflation targets. We do what we can to try and address issues over which we have direct control…
AR: Millions of our listeners are really worried about inflation. We have established that inflation in this country is going up, core inflation, and the prime minister has made it a priority to reduce inflation… So in terms of what the prime minister is doing in this country immediately in reduce inflation, what is it?
JC: What we are doing is making sure that in the areas where we have control – for example, one of the reasons why we are thoughtful but careful with the public sector payment awards is because we know that is one of the things that add inflationary pressure. We know very well that increased government borrowing is one of the things that goes around and increases inflationary pressures. So we stand firm on these things and that’s really in contrast to the Labor party, for example, which is talking about a big lending and talking about high inflation pay rises, which are all may increase inflationary pressure.
Here is the agenda for the day.
10 am: Sir Chris Whitty, the chief medical officer for England, gave evidence on the Covid question. In the afternoon Sir Patrick Vallance, the former chief science adviser, gave evidence.
11:25 am: Keir Starmer speaks at the Times CEO summit. At 12 noon he will be interviewed by Times Radio.
11:30 am: Downing Street held a briefing in the lobby.
Noon: The Bank of England has announced its latest interest rate decision.
12:35 am: Rishi Sunak speaks at the Times’ CEO summit.
2:15pm: Sunak holds a PM Connect Q&A in Kent.
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