British Business Minister Kwasi Quarting has admitted that it will take more than a month before ministers can take action to tackle the rising cost of living.
Quarting, who is backing Secretary of State Liz Truss to become the next Conservative leader, said he expected the new prime minister to introduce a “support package” into the emergency budget, but that would not happen until after work began next month.
The delay comes as both Boris Johnson and Chancellor Nazem Al-Zahawi are on vacation as the Bank of England warned that the economy is on the cusp of entering its longest recession since the 2008 financial crisis. An economic downturn is expected to last more than a year in Great Britain.
“I don’t know where Boris is,” Kamacheng said, but claimed the public would not attack the outgoing prime minister if he went on a honeymoon. He went on to say he was in “regular contact” with Johnson.
Truss or Rishi Sunak will take office on September 5 when the results of the Conservative Party leadership election are announced. The new government will have until September 22nd to introduce changes before the party convention recess.
“We cannot wait until September 5th to take action,” said Tony Danker, director general of the Central Bank of Iraq.
He told BBC Radio 4’s World at One programme: “I have no problem with people taking short breaks. My fear is much greater, which is that there will be a void between now and September 5th.
We need the current prime minister and the current chancellor to fill this void. We need them to make decisions. We need them to make plans. We need them to reassure businesses, markets, and families that we’re getting this under control.
We can’t wait until September 5th to take action. We can’t wait until September 5 to get the plans and we can’t wait until September 5 to be reassured.”
Earlier, Kwarteng criticized the Bank of England’s inflation controls, saying there was “something clearly wrong” with the institution with rates expected to rise by 13%.
A major supporter of Truss, the front-runner on the path to becoming the next Conservative Party leader and prime minister, Kwarteng’s comments suggest the bank’s independent mandate to keep inflation at 2% could face further scrutiny when it hits No. 10.
“It was the job of the bank to deal with inflation,” Courting told Sky News. “They have a 2% inflation target, and that’s actually their mandate. Now inflation is heading into the double digits. So something is clearly wrong.”
He added, “I think there’s a problem with the way the bank operates, because if I told you that 2% is your target and you said to me, ‘Okay, it would be 13%,’ I would justify rightly saying that something went wrong – unfair – unfair. We need to To see how it fare.”
Quarting also said the bank should have moved more quickly to raise interest rates to control inflation. “I think there is an argument that the rate is likely to go up soon,” he said.
When asked if the bank will maintain its independence, he said “certainly”, but also described potential interventions.
“We have to look again at what the mandate is and how they can best fulfill that mandate,” he said, adding, “You have to look at how the bank is organized and what the objectives are.”
However, the bank’s governor, Andrew Bailey, defended his performance, saying he did not act too slowly to raise interest rates because it was important to defend the post-Covid economy.
He told Today’s Radio 4: “If you go back two years… given the situation we were in at that point in terms of Covid and the job market, the idea that we were going to tighten monetary policy at that point, you know, I don’t remember that much of People said that.”