John Glen
Main Page: John Glen (Conservative - Salisbury)Department Debates - View all John Glen's debates with the HM Treasury
(1 day, 9 hours ago)
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Rachel Reeves
For my hon. Friend’s constituents in Dartford and for people around the country, there have been six interest rate cuts since the general election. The more than doubling of the headroom means that we have a bit more room for manoeuvre in the face of shocks. However, gas has set the price for energy at a third less than it was just four years ago, because of this Government’s investment in renewables.
John Glen (Salisbury) (Con)
I welcome the targeted nature of these measures, but three weeks ago it looked like inflation was going to return to the level that the right hon. Lady inherited when she took office in July 2024. That is no longer going to happen, but we are now seeing it the cost of borrowing. Given that we are spending well over £100 billion a year on debt interest, what assessment has the Chancellor made of the implications for the public finances of higher inflation and higher borrowing costs?
Rachel Reeves
It is because of those concerns and not wanting to put any upward pressure on borrowing costs or inflation that we are looking at what targeted support can be offered, rather than the blanket support we saw the previous time energy bills went up. The Bank of England offered its assessment on the potential impacts on inflation, but as the Governor of the Bank of England has also said, the upward pressure on inflation because of the conflict in the middle east is tempered somewhat by the action that I took in my Budget last year, which reduces inflation by between 0.4 and 0.5 percentage points, taking off some of that upward pressure on inflation.