Sunak: I’ll restore economic credibility

RISHI Sunak has vowed to restore the UK’s economic credibility after admitting it has taken “a bit of a knock” in recent weeks.

The Prime Minister said tax rises and spending cuts in tomorrow’s Autumn Statement were needed to reduce rising inflation and public debt.

Critics of his approach fear it could worsen a predicted two-year recession.

But Mr Sunak said decisions would be taken in a “fair” way, and everyone would benefit from reduced debt levels.

Speaking at the G20 summit in Indonesia, Mr Sunak said reducing inflation was his “number one challenge”.

Chancellor Jeremy Hunt has warned that everyone will pay more tax under his plans to repair the public finances.

The budget comes after Liz Truss and Kwasi Kwarteng’s “mini Budget” in September sparked financial turmoil and cost the nation billions. Mr Sunak yesterday refused to apologise for their blundering.

Instead, when pressed by Sky News, the PM said he has acknowledged “mistakes were made”, adding: “What I want to do now is fix them.”

Mr Hunt is set to announce spending cuts of about £35billion and plans to raise £20billion in tax tomorrow.

The pain is likely to include freezes to income tax bands – dragging people into higher rates – and increases to taxes paid on profits made from selling shares and second homes.

It is expected to also signal a squeeze on schools, transport and police. Mr Sunak has hinted that pensions will rise to keep pace with inflation.

The statement comes amid a worsening economic backdrop, with wages lagging behind rising prices and the Bank of England warning the UK is facing its longest recession on record.