What Rishi Sunak Predicted About Liz Truss' 'Fairytale' Economic Plans

Rishi Sunak reportedly avoiding Conservative Party conference this year, so that Liz Truss can "own" the unfolding economic chaos.
The former chancellor and leadership candidate can certainly claim reason for optimism.
He repeatedly warned that his strategy was not a good idea, long before the IMF and the Bank of England were forced to intervene.
While Ms Truss pledged tax cuts after tax cuts to win over Conservative members, Sunak suggested they could do real economic damage.
In a leadership debate on July 15, Mr Sunak accused his rival of "thrifty ie fairy tale" promising unfunded tax cuts.
"Liz, we have to be honest. Borrowing out of inflation is not a plan, it's a fairy tale," he said.
But Ms Truss was unconvinced and responded with a Conservative slogan: "You can't tax your way to growth".
Mr Sunak expanded on his criticisms later in the campaign.
On August 21, the team Mr. Sunak's campaign team released a statement warning that Truss' economic policies could cause an "inflationary spiral". £50 billion in permanent, unfunded tax cuts just once," Mr Sunak's spokesman said.
"This would mean increasing borrowing to historic and dangerous levels, putting public finances in serious danger and plunge the economy into an inflationary spiral.
"It's no wonder they want to avoid independent oversight of their emergency budget - they know you can't do both and it's time they said so now."
As expected, Ms. Truss' chancellor, Kwasi Kwarteng, avoided scrutiny from the Office of Budget Responsibility for his mini-budget.
The unfunded tax cuts were not well received by the markets.< /p>
The impact was immediate: the pound plummeted to record lows against the dollar and government borrowing costs soared .
Rising import costs risk worsening inflation across the board, worsening the cost of living crisis.
The Bank of England is expected to now raise interest rates to 6% by the end of the year, which will increase costs for mortgage holders and make it more difficult for businesses to invest.
Mr. Sunak is far from alone in warning Ms Truss' strategy in advance, but he certainly rejected her approach during the Tory leadership campaign.

Politics Sep 29, 2022 0 96 Add to Reading List

What Rishi Sunak Predicted About Liz Truss' 'Fairytale' Economic Plans

Rishi Sunak reportedly avoiding Conservative Party conference this year, so that Liz Truss can "own" the unfolding economic chaos.

The former chancellor and leadership candidate can certainly claim reason for optimism.

He repeatedly warned that his strategy was not a good idea, long before the IMF and the Bank of England were forced to intervene.

While Ms Truss pledged tax cuts after tax cuts to win over Conservative members, Sunak suggested they could do real economic damage.

In a leadership debate on July 15, Mr Sunak accused his rival of "thrifty ie fairy tale" promising unfunded tax cuts.

"Liz, we have to be honest. Borrowing out of inflation is not a plan, it's a fairy tale," he said.

But Ms Truss was unconvinced and responded with a Conservative slogan: "You can't tax your way to growth".

Mr Sunak expanded on his criticisms later in the campaign.

On August 21, the team Mr. Sunak's campaign team released a statement warning that Truss' economic policies could cause an "inflationary spiral". £50 billion in permanent, unfunded tax cuts just once," Mr Sunak's spokesman said.

"This would mean increasing borrowing to historic and dangerous levels, putting public finances in serious danger and plunge the economy into an inflationary spiral.

"It's no wonder they want to avoid independent oversight of their emergency budget - they know you can't do both and it's time they said so now."

As expected, Ms. Truss' chancellor, Kwasi Kwarteng, avoided scrutiny from the Office of Budget Responsibility for his mini-budget.

The unfunded tax cuts were not well received by the markets.< /p>

The impact was immediate: the pound plummeted to record lows against the dollar and government borrowing costs soared .

Rising import costs risk worsening inflation across the board, worsening the cost of living crisis.

The Bank of England is expected to now raise interest rates to 6% by the end of the year, which will increase costs for mortgage holders and make it more difficult for businesses to invest.

Mr. Sunak is far from alone in warning Ms Truss' strategy in advance, but he certainly rejected her approach during the Tory leadership campaign.