LONDON, May 26 (Reuters) – Britain’s government must
support the Bank of England’s decisions on interest rates,
finance minister Jeremy Hunt told Sky News in an interview
broadcast on Friday, saying there could be no trade-off between
cutting inflation and the risk of provoking a recession.
Asked by Sky News whether he was comfortable with the BoE
doing whatever was needed to bring down inflation, even if that
could cause a recession, he said: “Yes, because in the end,
inflation is a source of instability.”
“If we want to have prosperity, if we want to grow the
economy, if we want to reduce the risk of recession, we have to
support the Bank of England in the difficult decisions that they
take.”
British Prime Minister Rishi Sunak in January pledged to
halve inflation by the end of the year, but data released this
week showed the rate of price rises remaining stubbornly high at
8.7% and measures of underling inflation rising.
Asked again about the risk of rate hikes causing a recession
Hunt said: “We will deliver this task and we will make sure that
the government plays its part, the Bank of England plays its
part. But it is not a trade-off between tackling inflation and
recession. In the end the only path to sustainable growth is to
bring down inflation.”
(Reporting by William James
Editing by William Schomberg)
