UK interest rates, inflation: Tories beyond parody: Ian McConnell

Of course, it may be that it is unfair to contend that all senior Tories are simply failing to comprehend what is going on, as the likes of Prime Minister Rishi Sunak and Chancellor Jeremy Hunt lecture to the electorate on the economy in the most condescending of tones.

Some senior Conservatives must surely know exactly what they are doing and have done - in terms of the UK Government’s myriad and major economic errors and the continuing impact of these – even as they try to portray themselves as the friends of ordinary, hard-working households.

Annual UK consumer prices index inflation remained stuck at 8.7% in May, the highest among the Group of Seven leading industrialised economies, official figures revealed last week.

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As time passes, it becomes ever clearer, and it was plenty plain before, that the UK has some very specific inflation troubles, stemming in large part from the Tories’ Brexit folly.

What did the Conservatives think was going to happen to the cost of living in the UK when the pound tumbled in the wake of the 2016 Brexit referendum vote and sent the prices of imports soaring?

And what did they imagine would transpire when hugely beneficial free movement of people between the UK and European Economic Area countries was lost, fuelling a skills and labour shortage crisis in Britain and exerting upward pressure on wage inflation, as well as limiting the growth potential of the economy? And how did they imagine losing frictionless trade between the UK and EEA and triggering supply chain woe and chaos would pan out for the country?

Sadly, however, and true to form, the Tories are taking none of the blame for their foolishness, as Mr Hunt’s latest comments on Friday confirmed. Rather, they seem content in their ivory towers.

The Conservatives also continue to refuse to take responsibility for the savage austerity programme implemented from 2010, the effects of which we must realise are very much still with us and continue to weigh so heavily on households. Mr Hunt was part of the David Cameron and George Osborne administration which began the spectacularly ill-judged austerity programme and he appears in his current role to remain enthusiastic about such ideology, even though it has failed so spectacularly.

Likewise, the Tories continue to try to paint Brexit as a good thing when recent years have confirmed exactly what the experts who were so maligned by the Conservative Leavers told us – that leaving the European Union would bring with it a huge economic cost.

Not only that but the Conservatives continue to try to characterise themselves, in the most superior of tones, as responsible stewards on the economic front.

It really all is beyond parody.

To be fair to Mr Hunt, he was a Remainer and is now as Chancellor having to promote the Brexit cause. Having said that, he is not cutting a convincing figure at all as Chancellor, on any fronts, to put it mildly.

Speaking as he unveiled woefully inadequate measures on Friday aimed at helping homeowners hammered by the effect of the surge in UK interest rates on mortgage costs, Mr Hunt declared: “Tackling high inflation is the Prime Minister and my number one priority. We are absolutely committed to supporting the Bank of England to do what it takes.”

He added: “We will do what it takes, and we won’t flinch in our resolve because we know that getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses.”

This type of language is typical of the Tories, as is the tone.

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It implies misery, not for them of course but for the general public.

Not only that but it suggests the pain is going to last for a long time. This is something that the Conservatives seem to have a real proclivity for – after all, their savage austerity programme remains with us.

There is clearly room for debate on whether tackling inflation should be the first priority of the UK Government, given the sorry shambles we have on so many fronts.

And, while inflation is clearly causing huge pain and it is important to reduce it, the knock-on effect of this on growth and unemployment must be taken into consideration when deciding on the optimal course of action. Having said that, you never seem to hear much convincing sympathy for people who are unemployed from the Conservatives, and their policies signal they do not really care about growth.

This brings us to two further points.

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Firstly, it is easy to see how the UK Government has played a big part in the country’s specific inflation problems, by fuelling food prices and the cost of imports with Brexit and through its abject failure to take proper action to keep some kind of appropriate lid on household and business energy bills.

Furthermore, the fall in inflation that is projected to happen anyway is to do with base-year effects, so it is important that, if the UK Government attempts to claim credit for this, people are not taken in by such fantasy.

The Government has limited control, of course, over inflation. However, it has clearly made it worse.

And, if Messrs Sunak and Hunt are actually serious about taking meaningful action to reduce inflation, they should look at rejoining the European single market, thereby boosting the pound and thus reducing the cost of imports while also, crucially, tackling the skills and labour shortage crisis and the impact of this on pay. Of course, it remains perfectly reasonable for employees to seek pay increases in line with the soaring cost of living as the UK’s inflation crisis persists.

Rejoining the European single market would also help unwind dysfunction in supply chains caused by Brexit.

It would, of course, also be a very good thing indeed overall for the UK economy, boosting growth potential and living standards.

And it would certainly be a less painful way of tackling inflation than eye-watering rises in interest rates.

Of course, there is currently no prospect of rejoining the single market given the Tories’ deep-rooted ideology and Labour leader Sir Keir Starmer’s seeming dramatic conversion to the Brexit cause.

The Tories have got us to a place where households and businesses will, therefore, have to bear greater rises in interest rates than would have been the case if they had run the economy properly, and not made foolish decisions such as pursuing a hard Brexit at any cost.

So it will be a familiar story of more pain for other people.

The Conservatives will continue to attempt to portray themselves as the ones who know what they are doing on the economy - with the likes of what seemed like studiedly earnest remarks about inflation from Mr Hunt - and refuse to admit to their astounding mistakes. It is perhaps no wonder that this remains their strategy, given the degree to which the electorate has been taken in by their smooth talking for so many years, even though what the Tories have been saying has been absurd. People will not, however, be hoodwinked forever.