Jeremy Hunt says he will back more interest rate rises even if they cause recession

Jeremy Hunt has said he will back more interest rate rises even if they cause a recession in the UK.

Asked about the issue on Sky News, the chancellor said he was comfortable with the Bank of England doing "whatever it takes" to bring down inflation.

When asked whether he was comfortable with the central bank doing whatever was needed to bring down inflation, even if that could cause a recession, he said:

“Yes, because in the end, the inflation is a source of instability, we have to support the Bank of England in the difficult decisions that they take.

“When the prime minister announced that it was his objective to halve inflation in January, there were some people who derided that; they said: ‘Well, it’s automatic; inflation is going to come down anyhow.’

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"There’s nothing automatic about bringing down inflation; it is a big task but we must deliver it, and we will."

He added: “I have to do something else, which is to make sure the decisions that I take as chancellor, very difficult decisions, to balance the books so that the markets, the world can see that Britain is a country that pays its way – all these things mean that monetary policy at the Bank of England [and] fiscal policy by the chancellor are aligned."

Figures this week showed annual inflation in April was higher than expected at 8.7 per cent. Markets are predicting that interest rates could climb to 5.5 per cent by the end of the year, up from their current level of 4.5 per cent, which would put further pressure on borrowers and the housing market.

Meanwhile earlier this week, the International Monetary Fund said it no longer expected the UK to fall into recession this year.

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