Rishi Sunak pledges tax cuts as inflation hits target for first time in three years

Rishi Sunak's Tax Cut Promise

Rishi Sunak has pledged to cut taxes after inflation hit its target for the first time in three years, promising more money in people's pockets if re-elected as the growth rate reached two per cent.

Victory for the PM

This comes as a victory for the Prime Minister, with inflation dropping from a 41-year high of 11.1 per cent in October 2022, following energy cost hikes due to the invasion of Ukraine.

Plans for the Future

During a visit to the Sizewell B nuclear power station in Suffolk, Sunak announced plans to make £17 billion of cuts over the next five years, stating that Labour would reverse the progress made and increase taxes.

Inflation Figures

The Office for National Statistics reported a drop in food inflation to 1.7 per cent in the 12 months to May, down from 2.9 per cent in the previous year, with decreases in furniture and package holiday costs contributing to the overall rate reduction.

Bank of England's Stance

Despite the decrease in inflation, the Bank of England is unlikely to lower interest rates from the current 16-year high of 5.25 per cent, with concerns over inflation in certain sectors delaying any rate cuts.

Labour's Response

Shadow Chancellor Rachel Reeves highlighted that people are still feeling the pinch, with prices and mortgage bills on the rise and taxes at a 70-year high. Labour has ruled out increases in income tax, National Insurance, and VAT, but plans to raise levies by £8.5 billion, targeting big businesses and private schools.