Downing Street has said that further measures to help households adjust to inflationary pressures will not be forthcoming until Boris Johnson’s successor is appointed.
Acknowledging that the British public were facing “challenging times”, the PM’s official spokesman said that any decisions on further support would be up to the next prime minister and major decisions would have to wait until they were in place.
The spokesman said: “By convention, it is not for this prime minister to make major fiscal interventions during this period.”
Johnson himself has also previously suggested that no major changes in policy direction will be happening in the interim period between his resignation and the appointment of a new prime minister.
The result of the ongoing Tory leadership contest, now being fought between former chancellor Rishi Sunak and incumbent foreign secretary, Liz Truss, will not be announced until September 5. Meanwhile, Parliament is amid its summer recess and there are no plans to recall MPs early.
However, Johnson and the incumbent chancellor, Nadhim Zahawi, are set to meet this week to assess progress on the support package already unveiled by the government. This includes a £15 billion package of support which has gone into helping households with a £400 energy bills discount, while a payment £650 has been set aside for each household in the lowest income groups.
But ministers are facing pressure to do more after the Bank of England revised its inflation forecasts.
Inflation is now expected to peak as high as 13 per cent later in the year, as the energy price cap is set to increase again in October.
The second raising of the price cap within seven months is forecast to see the average domestic energy bill skyrocket to over £3,600 per year, with the economy set to plunge into recession in Q4.
Tony Danker, the director general of the Confederation of British Industry [CBI], has called for the current government and both leadership candidates to “come together to agree a common pledge to support people”, arguing that help for households cannot wait until the leadership contest has concluded.
Danker argued: “The economic situation people and businesses are facing requires all hands to the pump this summer. We simply cannot afford a summer of government inactivity while the leadership contest plays out followed by a slow start from a new prime minister and cabinet.”
Scottish first minister Nicola Sturgeon has also pleaded for urgency in the matter, calling for the PM and first ministers in Scotland, Wales and Northern Ireland to come together and agree on measures.
On the campaign trail, Sunak has hit out at his rivals plans to address the crisis, warning that they “won’t touch the sides” and “bolder action” is needed.
Former Northern Ireland secretary, Brandon Lewis, one of Truss’ backers, has said that “lowering the tax burden” rather than “giving out handouts” would address inflation by putting “more money in people's pockets, creating a high-growth economy with higher wages, more people in work.”
