The economy risks entering a ‘inflationary spiral’ claims PM Boris

LONDON (Parliament Politics Magazine) – Johnson is widely thought to be always eager to raise government expenditure, with only the more fiscally disciplined chancellor, Rishi Sunak, acting as a check. However, Johnson hinted that the Treasury has won this fight in his comments on inflation.

Johnson made it clear that he opposed utilising benefit increases to help people cope with rising costs of living since it could lead to inflation. He warned of the possibility of a “inflationary spiral.” He replied, “Correct,” when Susanna Reid, the interviewer suggested that inflation may reach 10%. However, he appeared to rule out pushing benefit increases forward to help. 

He stated that the surge in global energy prices had had a short-term toll on the UK. If they responded by raising prices and costs across the country, if they responded by the government stepping in and driving up inflation, that would affect everyone, meaning that people’s mortgage interest rates would rise, the borrowing cost would rise, and they would face an even worse problem.

He said he was sorry to say it, but they must use caution in their approach. In the short term, they needed to aid people like Elsie and the families that were named (during the interview) with large numbers of taxpayers’ money, either through local councils or through all of the schemes they had been implementing. However, the best solution was to have a strong economy and where they kept interest rates to the reasonable minimum.

Benefits were increased every year in April, but the current year’s rise is well below the current inflation rate because the rise is connected to the inflation rate of the previous September. It is the same as a cut in real terms. To compensate, ministers have been encouraged to speed the next benefit increase, but Johnson appeared to be firmly opposed to this alternative.

The PM’s remarks, according to Jonathan Ashworth, the shadow work and pensions secretary, could also be a clue that the government will ditch the triple lock, which ensures that pensions increase every year in line with earnings, inflation, or 2.5 percent, whichever is higher.

Johnson couldn’t offer any immediate, further assistance to people who are currently struggling with bill payments. He stated in broad terms that there was more that they could do, but he did not elaborate. The interview’s most difficult moment occurred when he was asked for suggestions for Elsie, a 77-year-old widow whose monthly energy bills have increased from £15 to £85. Johnson brought up the government’s previous efforts to assist. When asked what Elsie should give up, Johnson stated that he did not want her to give up anything. However, he did not mention the possibility of additional bill assistance this year, He also stated that it was critical to invest in energy now in order to ensure supply security in the medium and long run. When told that Elsie spent her day taking buses with her freedom pass to save money on energy at home, Johnson responded brusquely that as London mayor, he instituted the 24-hour freedom pass. Reid inquired if he believed Elsie should be thankful.

Here is the summary of the afternoon

  • PM Johnson has used a major television interview to imply that he opposes pushing forward benefit increases to help people cope with rising living costs because it could lead to inflation.  He admitted that the government had not done enough to help individuals, but he stated “there is more that we can do,” without elaborating on what that may entail or when more assistance might be delivered. According to Labour, Johnson came across as narcissistic and out of touch throughout the interview. 
  • Johnson reminded the Ukrainian parliament that no peace settlement should be imposed against the will of the Ukrainian people, describing the effort to keep Russian soldiers at bay as “Ukraine’s finest hour.”
  • Legal challenges to the policy of deporting asylum seekers to Rwanda may be one of the reasons why the plan has yet to deter unofficial Channel crossings, according to Downing Street.
  • After an image surfaced of him drinking a beer with staff in a constituency office last year, Keir Starmer slammed the Conservatives of “mudslinging” over suggestions he broke lockdown rules.

Kourtney Spak

Kourtney Spak is an american journalist and political commentator. Her journalism career focuses on American domestic policy and also foreign affairs. She also writes on environment, climate change and economy.