Rishi Sunak thrust back into the spotlight by cost of living crisis

But there was nowhere for the Chancellor to hide on Thursday as the long feared squeeze on household budgets became a painful reality for millions of households.

The double blow of the rise in the energy price cap and the increase in interest rates has thrust the economy back to the centre of the political agenda after weeks dominated by allegations of lockdown busting parties in Downing Street.

To try and take the sting out of the sharp spike in the cost of living, Mr Sunak dusted off his chequebook again on Thursday announcing a £9.1 billion package of support that would mean £350 in rebates for over 28 million households.

However in contrast to his earlier giveaways during the first stages of the Covid pandemic, this intervention received a more lukewarm response.

Labour MP Meg Hillier dubbed him the ‘Klarna Chancellor’ – a reference to part of the rebate scheme which will require people to pay back a £200 discount on their bills over five years starting next April.

Others criticised the decision to distribute a further £150 depending on which Council Tax band their home is in.

Economists always predicted there would be tougher times for the Chancellor after his popularity soared as he dished out billions of pounds in worker and company support during the unprecedented economic and health crisis of the pandemic.

Since last year he has stressed the need to fix the public finances following that £400bn of emergency funding and sought to portray himself as a low tax, fiscally Conservative chancellor.

The problem is the UK’s tax burden is set to rise to its highest level for 70 years and the Prime Minister is committed to spending more money to level up the country and repay those Labour voters who turned Tory in 2019.

And while there is a good story to tell on the UK economy – the IMF says GDP will grow by 4.7 per cent this year, unemployment is down and borrowing is £13bn lower than expected so far this financial year – all that could be drowned out because of inflation and the big squeeze.

Amid the turmoil at No 10, Conservative MPs might still think Mr Sunak presents a better alternative to Mr Johnson. A poll by Ipsos, published by The Standard this week, shows the public still see him as having what it takes to become PM.

But if the Chancellor’s actions don’t do enough to take the sting out of the sharp rise in the cost of living then a public already weary of the partygate scandal may take a different view come the next election.


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