The Prime Minister says he feels a “deep moral responsibility” to deliver on his pledge to halve inflation after the key driver behind the cost-of-living crisis stayed static last month.
Office for National Statistics data published on Wednesday showed that the Consumer Prices Index inflation (CPI) remained at 8.7% in May, the same level as in April, despite experts forecasting a fall to 8.4%.
Rishi Sunak, due to speak on Thursday at an economy-focused PM Connect event in the south-east of England, will look to reassure workers about the pressures being caused by rising prices.
In pre-briefed comments, Mr Sunak is expected to say: “I feel a deep moral responsibility to make sure the money you earn holds its value.
“That’s why our number one priority is to halve inflation this year and get back to the target of 2%.
“And I’m completely confident that if we hold our nerve, we can do so.”
The premier’s speech will take place after Bank of England decision-makers have met to look at interest rates.
The Bank is expected to raise the base rate by 0.25 percentage points on Thursday, taking it to 4.75%.
Some commentators have even raised the possibility of a more aggressive increase of 0.5 percentage points.
But a further rise is likely to pile more pressure on mortgage-holders as rates are already at close to 15-year highs.
Chancellor Jeremy Hunt has said the Government will “stick to its guns” and insisted patience was needed for the Bank’s rate rises to curb inflation.
The Treasury chief has so far dismissed suggestion that ministers could intervene to assist homeowners with rising mortgage rates.
Addressing business figures on Thursday, Mr Sunak will stress that “beating inflation has to be the priority”.
He is set to add: “Because if we don’t get a grip on inflation now, the damage will be worse and longer lasting.”
Transport Secretary Mark Harper said there would be “no quick fix” to the current economic situation.
“The best thing we can do to help people, the best tax cut if you like, is to get inflation under control,” he told ITV’s Peston programme.
“That will then enable the Bank of England to lower interest rates.”
Mr Harper also suggested that using public money to help alleviate mortgage pressures could “make things worse” by keeping inflation and interest rates “higher for longer”.
Wednesday’s CPI figures mean that a shop which cost around £100 a year ago would cost around £108.70 today.
Stubborn inflation is set to increase pressures on households.
Figures from the Money Advice Trust show that since March 2022 the number of adults who are behind on one or more household bill has risen from 7.9 million to 11.6 million.
Halving inflation by the end of the year is one of the Tory Prime Minister’s top five pledges to the country ahead of a likely general election in 2024.
He has also set the goals of growing the economy, reducing national debt, stopping boats of migrants from crossing the Channel and cutting NHS waiting lists.
