Chancellor Jeremy Hunt has advocated using interest rate increases to calm spiraling inflation even if they increase the risk of tipping the UK into recession.
Hunt insisted in an interview broadcast on Friday that “the only path to sustainable growth” is to reduce the soaring prices behind the cost-of-living crisis.
The Bank of England has been raising interest rates as one measure to tackle inflation, but it could raise them higher than the 4.5 percent it is currently at.
Although down from 10.1 percent, the consumer price index for inflation remains stubbornly high at 8.7 percent while food remains alarmingly expensive.
Hunt told Sky News that prioritizing measures to slow price rises was necessary even if interest rate hikes hurt the UK’s gross domestic product, or gross domestic product, which is a measure of the size of the economy.
Asked if he was comfortable with the Bank working to bring down inflation even if it could precipitate a recession, Hunt said: “Yes, because ultimately inflation is the source of instability.
If we want to achieve prosperity, grow the economy, and reduce the risk of recession, we must support the Bank of England in the difficult decisions they make.
“I have to do something else, which is to make sure the decisions that I make as an advisor, very difficult decisions to balance the books so that the markets, and the world, can see that Britain is the country that pays for it – all these mean things that monetary policy in the Bank of England (and) policy Finance by the Chancellor is compatible.”