Is Rishi on track to halve inflation? CPI forecast to rise this week and rates get hiked again
Government efforts to take the credit for ‘falling inflation’ risk backfiring because half of the public does not know what the phrase means.
Rishi Sunak has made getting prices under control one of his five key pledges to voters.
The Prime Minister has said it would be ‘completely transformative’ and ‘people will have more money to spend’ if his self-imposed target of halving inflation was hit by the year end.
That ambition will receive a blow this week when new figures are expected to show the pace of price rises rose above 7 per cent last month, fuelled by costlier petrol.
Interest rates are also expected to rise again this week in the latest bid to curb inflation further.
Inflation risk: Rishi Sunak and Jeremy Hunt are desperate to get the cost of living under control
Sunak previously implied that halving inflation to around per cent would also mark an end to the cost-of-living squeeze.
But a survey by pollster YouGov suggests that his message will fall on many deaf ears. It found that only half the public understood that if inflation fell, it meant that prices were still rising, just not as fast as before.
‘Worryingly, 36 per cent thought it meant prices had fallen, which could fuel distrust,’ YouGov added.
Claiming people will have more cash in their pockets as inflation falls ‘plays on this misunderstanding,’ said Johnny Runge, senior research fellow at King’s College London.
‘It’s a bad political strategy because it’s a lose-lose situation,’ he added. ‘If you don’t achieve your target, you come in for criticism. But if you do and you communicate it as a success story for the Government, the public will not feel that and you risk causing a lot of resentment.’
Despite the setback expected this week, Chancellor Jeremy Hunt and Bank of England Governor Andrew Bailey remain confident that Sunak’s inflation goal can be hit this year as energy bills fall.
But even if Sunak, pictured, hits his target on inflation – which was at double-digit levels when he made the pledge – it will be a hard sell convincing voters that they should be grateful, experts say.
The Institute for Fiscal Studies reckons setting an inflation target ‘was always a bit of a gamble’.