Prime Minister and Chancellor on holiday as Bank of England warns UK hit by recession | political news

Both Boris Johnson and his Chancellor Nadhim Zahawi are on holiday as the Bank of England raised interest rates for 27 years and warned of the longest recession since the financial crisis.

Government faces calls for urgent action to tackle rising energy prices Bank of England Governor Andrew Bailey raised interest rates from 1.25% to 1.75%the largest increase since 1995, in an effort to contain runaway inflation.

The Bank’s Monetary Policy Committee (MPC) forecast inflation of 13.3% in October, the highest level in more than 42 years.

It warned that difficult economic conditions will cause real household incomes to fall for two years in a row, the first time it has happened since the record break in the 1960s.

But when the grim economic outlook was revealed, both the Prime Minister and… Mr Zahawi were on holiday from Westminster.

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The chancellor is reportedly working remotely while away for a few days.

“There is no such thing as vacation and no work,” the chancellor said.

“I’ve never had that in the private sector, nor in the government. Ask any entrepreneur and they can tell you.

“Millions of us dream of getting away with our families, but the privilege and responsibility of public service means you can never switch off, which is why I’ve had calls and briefings every day and will continue to do so.”

The Prime Minister’s official spokesman confirmed last week that Mr Johnson would be going on holiday from Wednesday, despite only being in office for just over a month.

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Reducing inflation to 2% remains ‘priority’

The Prime Minister will remain in charge of the country and receive necessary updates, he told reporters.

Downing Street declined to give details on where the prime minister would spend the period of annual leave until the end of the week, insisting he would still run the country.

When asked who would be in charge while Mr Johnson was away, the Prime Minister’s official spokesman said: “It will be the standard pattern.

“The Prime Minister will be updated if necessary. The Deputy Prime Minister and, as always in a cabinet government, other ministers, will be on hand to support if necessary.”

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‘Dismal, gloomy forecast’ for UK economy

However, Mr Zahawi has responded to the Bank of England’s announcement.

“Along with many other countries, the UK is facing global economic challenges and I know these predictions will be worrying for many people,” the Chancellor said.

“Tackling the cost of living is a top priority and we have taken action to help people through these difficult times with our £37 billion household aid package, which includes direct payments of £1,200 to the most vulnerable families and a £1 reduction 400 on the energy bill for everyone.

“We are also taking important steps to bring inflation under control through strong independent monetary policy, responsible tax and spending decisions and reforms to boost our productivity and growth.

“The economy has recovered strongly from the pandemic, with the fastest growth in the G7 last year, and I am convinced that the action we are taking means we can also address these global challenges.”

Read more:
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The Treasury later released a readout of a telephone conversation Zahawi had with the governor of the Bank of England on Thursday afternoon, in which it said the two discussed actions they are taking to combat high inflation and the economic challenges the country is facing. to face.

Energy Secretary Greg Hands claimed the government is “fully working” on what is “ministers’ priority”, despite both Mr Johnson and Mr Zahawi being out of Westminster.

Pressed on how the Prime Minister and Chancellor can work hard abroad, Mr Hands replied: “Because we have already made the decisions in terms of the bailout package currently in place.

“Some of those measures are yet to come – such as the £400 aid which will start in October, such as those payments to people on disability benefits which will start in September.

“So all of this leads to a series of support measures for consumers and bill payers.

“But that situation will be continuously assessed and I am sure that whoever becomes the next prime minister, it will absolutely be their number one priority, as it will be for the current and outgoing prime minister.”

Labor leader Sir Keir Starmer is currently on vacation.

But Rachel Reeves, shadow chancellor, said the forecast was “further evidence that conservatives have lost control of the economy”.

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