Interest rate remarks not an attempt to undermine Bank of England, Sunak says

Rishi Sunak has insisted he was not attempting to undermine the independence of the Bank of England when he suggested a new Conservative government would lead to lower interest rates.

The Prime Minister told The Times that a vote for the Tories is a vote for cuts to interest rates, despite that being a decision for the independent Bank of England.

Experts think the Bank is likely to cut interest rates in the coming months, after headline inflation eased to 2.3% in the 12 months to April 2024, down from 3.2% in the 12 months to March.

Such a decision would impact borrowing, and could be a boon for people trying to buy a house as mortgages may become more affordable.

Asked by reporters if his remarks in The Times were an attempt to undermine the Bank of England, the Prime Minister told reporters: “No, I didn’t do that at all.

“What I said was the governor (Andrew Bailey) himself had said he was optimistic that we were heading in the right direction and I agree with him, because we are heading in the right direction.

“The best way for interest rates to come down, which is of course an independent decision made by the Bank of England, is that we get a grip of inflation.

“That is why I am pleased that inflation has come down from 11%, effectively back to normal, just over 2%, as part of an economic plan that is working.

“The economy is growing, wages are rising, energy bills are falling and that is why I am confident that if we stick to that plan, people can have confidence that there is a secure future ahead of us.”

During a visit to Niftylift, a cherry picker manufacturer in Milton Keynes, Mr Sunak also claimed there was a “clear choice” between the two main parties on tax.

General Election campaign 2024
Prime Minister Rishi Sunak takes part in a Q&A with members of staff during a visit to Niftylift in Milton Keynes, Buckinghamshire (Aaron Chown/PA)

Asked if he would consider a “triple lock” on taxes when the income tax threshold freeze ends in 2028, the Prime Minister said: “When it comes to taxes, it’s a clear choice at the election.

“With the Conservatives you’ve got an economic plan that is working, that is allowing us to cut people’s taxes.

“The average worker is getting a tax cut worth £900 this year as a result of our plan, and that’s because I believe hard work should always be rewarded, and we are crystal clear, the Chancellor and I, that we will keep cutting national insurance when it’s responsible to do so, so everyone’s hard work can be rewarded.”

Mr Sunak then turned to criticising his opponent, adding: “On Monday, Keir Starmer was asked multiple times and refused to rule out raising VAT.

“Last night, in a panic he suddenly did.”

Both parties have ruled out hikes to VAT, income tax, or national insurance if they win the General Election.