James Cleverly mocked by BBC as he struggles to explain PM’s inflation plan (2024)

James Cleverly mocked by BBC as he struggles to explain PM’s inflation plan (1)

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Floundering foreign secretary James Cleverly was left red faced in a bruising BBC interview when he was put on the spot over the inflation crisis.

Challenged six times to say how Rishi Sunak planned to cut price rises, Mr Cleverly stumbled in his replies – and was at one point greeted with laughter by BBC Radio 4 interviewer Amol Rajan.

Eventually Mr Rajan ended the interview abruptly, silencing Mr Cleverly and saying: “We’re going to the weather.”

Their painful exchange in full

Tongue-tied Mr Cleverly mistakenly talked about “low-skilled inflation” harming the economy, when he meant to say “low-skilled immigration”.

Mr Rajan became so frustrated with Mr Cleverly’s evasiveness that he sarcastically thanked him for “giving me an economics lesson”.

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Interviewed on the Today programme ahead of the Bank of England’s expected interest rate rise, Mr Rajan asked him: “What is the PM’s plan to halve inflation?”

Mr Cleverly intially said it was about “influencing” events. He argued that helping resolve the Ukraine conflict would be “a contributory factor” in getting inflation down.

He also said: “By making sure the economy is more productive economy, through, er, training, through um, er, er, you know, apprenticeship work...”

The BBC host fired back: “That’s not going to bring inflation down.”

James Cleverly mocked by BBC as he struggles to explain PM’s inflation plan (5)

Pressed again Mr Rajan what Mr Sunak would do about inflation in the short-term, Mr Cleverly said: “As I, er, say, er, the, er, point is, with things like, erm, driving down the implications of, et, you know, fuel and food.”

The minister was told by the Today programme presenter that core inflation in the UK was worse that neighbouring countries, and was asked again what the government was doing about it. The cabinet minister said: “One of the main vehicles for short-term addressing of inflation is interest rates.”

Reminded that Mr Sunak did not set interest rates – and pressed again for steps taken by government – Mr Cleverly said: “Not all the levers of control are in the government’s hands.”

Mr Rajan could be heard laughing at the response. The BBC host thanking him for the “economics lesson” on the independence of the Bank of England, before pressing him once again for the short-term measures made by Mr Sunak.

Mr Cleverly said the government had been “cautious on public-sector pay awards” to keep inflation down, adding: “We’re very conscious that increased government borrowing is one of those things that loops around and increases inflationary pressures.”

Asked whether post-Brexit immigration rules could be relaxed, Mr Cleverly dismissed the idea and said longer-term measures to boost Britain’s productivity were vital.

Mr Rajan cut off the minister and said: “Forgive me, we’ve got to go to the weather.”

James Cleverly mocked by BBC as he struggles to explain PM’s inflation plan (6)

Mr Sunak promise to halve inflation by the end of 2023 as one of his five big pledges to the electorate. He made the pledge in January, when the latest inflation figure was 10.7 per cent, but price rises have come down more slowly than expected since then.

The Bank of England is set to hikeinterest ratesfor the 13th time in a row today after shock inflation figures showed price rises frozen at 8.7 per cent.

An increase from 4.5 per cent to 4.75 per cent is most likely when governorAndrew Baileyannounces the decision at 12 noon – but a larger hike to 5 per cent is a possibility.

Top economists – including one Jeremy Hunt’s senior advisers – have said the Bank of England has no choice but to trigger a recession in order to finally tameinflation.

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Karen Ward, a member of the chancellor’s economic advisory council, said the central needed to “create a recession”, adding: “There’s no other way around it.”

But Mr Cleverly rubbished suggestions that the UK should intentionally aim to enter a recession with high interest rates to tackle persistently high inflation.

Speaking to Sky News, he said triggering a recession was not the answer. “What we need to do is we need to grow the economy,” he said. “High interest rates don’t help with that.”

James Cleverly mocked by BBC as he struggles to explain PM’s inflation plan (2024)

FAQs

How does raising interest rates help inflation? ›

When the central bank increases interest rates, borrowing becomes more expensive. In this environment, both consumers and businesses might think twice about taking out loans for major purchases or investments. This slows down spending, typically lowering overall demand and hopefully reducing inflation.

Who is James Cleverly's wife? ›

Personal life. Cleverly married Susannah Sparks in 2000; the couple have two sons. Cleverly lives in Blackheath, Southeast London.

How to bring inflation down? ›

The Federal Reserve seeks to control inflation by influencing interest rates. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down.

Why won't raising interest rates work? ›

Raising borrowing costs for consumers theoretically means they have less to spend on other goods and services. Just as importantly, it raises borrowing costs for businesses, reducing demand for investment and lowering profits. This lowers their ability to employ people or give inflation-busting pay rises.

Who benefits from higher interest rates? ›

As interest rates rise, the interest income from loans typically increases faster than the interest paid on deposits, leading to wider profit margins. Additionally, higher interest rates can boost the earnings of insurance companies and investment firms, as they often hold large portfolios of interest-sensitive assets.

Do banks make more money when interest rates rise? ›

A rise in interest rates automatically boosts a bank's earnings. It increases the amount of money that the bank earns by lending out its cash on hand at short-term interest rates.

What does it mean when the Fed raises interest rates? ›

When the Fed increases the federal funds rate, it typically pushes interest rates higher overall, which makes it more expensive for businesses and individuals to borrow. The higher rates also promote saving.

What causes inflation to rise? ›

More jobs and higher wages increase household incomes and lead to a rise in consumer spending, further increasing aggregate demand and the scope for firms to increase the prices of their goods and services. When this happens across a large number of businesses and sectors, this leads to an increase in inflation.

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