The Prime Minister has warned that rising inflation “could get worse” if the UK Government was to launch big-spending benefits packages to support hard-up Britains. Boris Johnson warned the UK is facing a “very severe” inflationary risk, with a knock-on for interest rates if benefits payments were increased.
Mr Johnson warns on Good Morning Britain of a “very severe” inflationary risk to the United Kingdom’s economy.
The Prime Minister added that this inflation rise “could get worse” with a knock-on effect on interest rates if benefits are increased.
“I’m sorry to say this but we have to be prudent in our approach,” he said.
Surging prices are contributing to the biggest squeeze on household incomes since at least the 1950s, putting pressure on the government to come up with support for the poorest, particularly those who cannot afford soaring energy bills.
Mr Johnson acknowledged that the government could not provide enough support to offset the higher costs immediately, but said it was working to deal with prices over the medium and long term.
“I accept that those contributions from the taxpayer – because that’s what it is, taxpayers’ money – isn’t going to be enough immediately to help cover everybody’s costs,” he told ITV television.
“Of course that isn’t going to work enough in the short term. There is more that we can do. But the crucial thing is to make sure we deal with the prices over the medium and long term.”
Asked why welfare benefits would not rise in line with inflation, Johnson said the government had to be wary of driving up inflation even further. It hit a 30-year-high of 7% in March.
The Prime Minister also told ITV’s Good Morning Britain: “If you put a windfall tax on the energy companies, what that means is that you discourage them from making the investments that we want to see that will, in the end, keep energy price prices lower for everybody.”
Challenged about benefits failing to keep pace with rising inflation, he said: “We have a short-term hit caused by the spike in energy prices across the world.
“If we respond by driving up prices and costs across the board in this country, responding by the Government stepping in and driving up inflation, that will hit everybody.
“And that will mean that people’s interest rates on their mortgages go up, the cost of borrowing goes up, and we face an even worse problem.”
