UK Chancellor of the Exchequer (the same as a Finance Minister) Rishi Sunak delivered remarks regarding the UK cost of living crisis, Reuters reported. Sunak said that high inflation is causing acute distress, but that the UK has the tools needed to combat inflation, and that the country will turn the current moment of great difficulty into a springboard for economic growth.
Sunak said that most the UK inflation overshoot can be explained by global shocks and the situation has become more serious over the course of the year, while core inflationary pressures have become broader-based. The UK is acutely exposed to the energy price shock in Europe, Sunak noted.
Long-term inflation expectations have risen above their historical long-term averages, Sunak continued, adding that the UK must not allow people to expect inflation will remain high over the long-term. The UK's primary tool to fight inflation remains independent monetary policy, he said, before reiterating his belief that it is right that the Bank of England is independent.
The UK also needs responsible fiscal policy, Sunak continued, noting that it shouldn't make the inflation problem worse. In the autumn, the government will bring forward tax cuts and reforms to encourage business investment, Sunak announced, adding that the government will provide significant support to the British people.
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