London Daily

Focus on the big picture.
Monday, Sep 15, 2025

Rishi Sunak attacks Truss tax cut plan after big interest rate rise

Rishi Sunak attacks Truss tax cut plan after big interest rate rise

Chancellor Nadhim Zahawi said to be on holiday as Bank of England adds to dire economic outlook
Rishi Sunak has seized on the Bank of England’s historic half-point rate rise to claim that Liz Truss’s plan for unfunded tax cuts would “make everyone poorer”.

The Bank’s gloomy forecasts, published alongside the rate decision, underline the scale of the challenge facing the next prime minister, with the economy projected to plunge into a prolonged recession by the end of the year.

Despite the dire economic outlook, the Guardian has learned the chancellor, Nadhim Zahawi, is away from Westminster, as the caretaker government takes a back seat while the leadership contest rages.

Zahawi was said to be working remotely from a family holiday.

In a statement, the chancellor said: “There is no such thing as a holiday and not working. I never had that in the private sector, nor in government. Ask any entrepreneur and they can tell you that.”

He added: “Millions of us dream about getting away with our families, but the privilege and responsibility of public service means that you never get to switch off, that’s why I have had calls and briefings every day and continue to do so.” The prime minister is currently on holiday.

Zahawi put out a written statement on the Bank’s announcement and is holding meetings with its governor, Andrew Bailey, later on Thursday and the Treasury’s chief economist.

Sunak, the underdog in the leadership race, has repeatedly said throughout the contest that he would wait until inflation was under control, before embarking on a tax-cutting spree.

By contrast, Truss has promised £30bn worth of tax cuts, which Sunak has claimed would push up borrowing and boost inflation.

“The Bank has acted today and it is imperative that any future government grips inflation, not exacerbates it,” he said.

“Increasing borrowing will put upward pressure on interest rates, which will mean increased payments on people’s mortgages. It will also make high inflation and high prices last for longer, making everyone poorer.”

Truss has cited the rightwing economist Patrick Minford to support her argument. As he stepped up his attack on her approach, Sunak tweeted a link to a ready reckoner showing the cost to mortgage borrowers, if interest rates rose to 7%, as Minford has said they might have to.

Truss said the rate rise “underlines the need for the bold economic plan that I am advocating”.

She promised an emergency budget to “kickstart my plan to get our economy growing and offer immediate help to people struggling with their bills” though she has so far proposed few measures to deal with the cost of living, aside from suspending the green levies on energy bills, and reversing recent tax rises.

Earlier, Truss supporter Suella Braverman said that if the foreign secretary became prime minister, she would review whether the Bank’s mandate was “fit for purpose” and examine its “exclusionary independence on interest rates”.

Braverman, the attorney general, told Sky News the Tory leadership frontrunner would look again at the Bank’s powers. “Interest rates should have been raised a long time ago and the Bank of England has been too slow in this regard,” she said.

She added: “Liz Truss has made clear that she wants to review the mandate that the Bank of England has, so that’s going to be looking in detail at exactly what the Bank of England does and see whether it’s actually fit for purpose in terms of its entire exclusionary independence over interest rates.”

Truss told a Conservative hustings on Wednesday night she would alter the Bank’s mandate because of the changing economic picture. “The best way of dealing with inflation is monetary policy, and what I have said is I want to change the Bank of England’s mandate to make sure in the future it matches some of the most effective central banks in the world at controlling inflation.

“The last time the mandate was looked at was in 1997 under Gordon Brown. Things are very, very different now.”

Mel Stride, the chair of the Treasury select committee and a Sunak supporter, said it would be dangerous to cut taxes this autumn. “What we must do now is avoid stoking the inflation and making the problem even worse,” he said. “One of the ways you can make the problem very significantly worse is by coming forward with large-scale, tens of billions of pounds’ worth, of unfunded tax cuts.”

He added: “The big decision, fiscally, here is around tax. You have to do it in a measured way and at the right time but not start coming forward with tens of billions of unfunded tax cuts right now. I think that would be really quite dangerous.”
Newsletter

Related Articles

0:00
0:00
Close
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
×