Sunak pledges further tax cut after inflation drops to two per cent

19 June 2024, 10:22 | Updated: 19 June 2024, 10:26

Rishi Sunak pledges tax cuts on LBC
Rishi Sunak pledges tax cuts on LBC. Picture: global

By StephenRigley

Rishi Sunak has pledged to cut taxes further after inflation fell to the Bank of England's target for the first time in nearly three years.

Listen to this article

Loading audio...

Rishi Sunak has pledged to cut taxes further after inflation fell to the Bank of England's target for the first time in nearly three years.

The latest official figures showed headline CPU dropping to two per cent in May, from 2.3 per cent in April, paving the way for interest rate cuts.

It marks the first time inflation has been at the BoE's goal since July 2021, before the cost-of-living crisis saw inflation shoot up – at one stage hitting levels not seen for 40 years.

The Prime Minister said that the drop in inflation meant any future Tory government would now be in a position to cut more taxes.

He told LBC that the last few years have been "tough for everybody" but his government "stuck to a plan"."It wasn't always easy, but we've got there."

“It is because of that economic stability that we have restored, which was my priority when I got this job, that we have now been able to start cutting people’s taxes.

“If I win this election, I want to keep doing more of that, cutting people’s taxes at every stage of their life.”

Sunak on Inflation

Read More: Sunak insists 'the only poll that matters is July 4' as he defends dire polling for Tories ahead of election

Read More: 'They can probably afford Labour's tax rises': Sunak brushes off billionaires abandoning Tories

Shadow chancellor Rachel Reeves said people were still “worse off” despite the decline.Services inflation, which has been highlighted as a potential hurdle to interest rate cuts, fell to 5.7pc in May, down from 5.9pc in April. 

However, this was less than the drop to 5.5pc that economists had predicted.

The Bank of England is not expected to begin cutting interest rates at its next meeting tomorrow and the latest data has seen traders reduce bets on a reduction in borrowing costs in August, although some economists still think it is a possibility.

Yesterday Keir Starmer refused to rule out a council tax rise. He dodged questions on whether council tax could rise, saying "it would be foolish to write five years worth of budgets."

He told LBC: "It would be foolish to write five years worth of budgets on air.

"There are some tax rises, we want to get rid of non dom loopholes, private equity loopholes, we want a better windfall taxes.

"None of our plans require a tax rise, they will be based on growth."

More Latest News

See more More Latest News

Breaking
Breaking News

Pensioner arrested over 'Day of the Jackal threat to kill PM' posted on social media

Police at the scene in central London on Monday at 'Fast Eddie's' mansion

Three knifed at playboy’s notorious £15m London mansion where Bonnie Blue filmed sex party

The body of Scottish businessman Campbell Scott was found in a remote area 60 miles from Nairobi

Scottish businessman's body found in sack in Kenya with 'his hands and feet bound with rope'

A Biscoff ice cream product has been recalled

Popular Biscoff treat urgently recalled from shelves amid health fears after 'undeclared' allergy risk discovered

Polish Armed Forces Day Celebrated In Warsaw, Poland

NATO scrambles warplanes in Poland after Russia launches latest strikes on Ukraine

Mikel Arteta (Arsenal manager) applauds the fans on the final whistle at the Arsenal v West Ham United

'Over my dead body': Arsenal boss Mikel Arteta won't concede Premier League title to Liverpool

Amanda Pritchard's resignation as Chief Executive is expected to be confirmed this afternoon

NHS England chief executive Amanda Pritchard to step down from her role

Jose Mourinho was appointed Fenerbahce manager in 2024

Galatasaray accuse Fenerbahce boss Jose Mourinho of making 'racist statements'

Exclusive
Ofcom will 'name and shame' social media companies that don't take action to cut down abuse of women and girls

Social media companies to be 'named and shamed' for not protecting women and girls online, Ofcom chief tells LBC

Video footage shows police rushing towards the Hart Space during the attack

Horror footage shows moment police rush towards Southport dance studio while killer is still inside

Registered XL Bully dogs must be housed securely, neutered, kept on a lead and muzzled in public

Man in his 80s seriously injured after XL bully attack in Warrington

Ocean Infinity is searching for the downed plane

British team launches 'final search' for MH370, in bid to solve mystery of vanished plane 11 years on

The BBC has pulled the documentary from iPlayer while it does more 'due diligence'

BBC Gaza documentary cameraman ‘celebrated October 7 attacks’ as cost of film is revealed

Bessborough Road, where the crash took place

Pedestrian in her 40s killed in London bus crash as car driver arrested for dangerous driving

Energy bills are set to rise again

Energy bills to increase again as price cap rises more than expected

Exclusive
Boris Johnson has said the UK should spend more on defence

UK should spend 3% of GDP on defence and could send up to 10,000 troops to Ukraine, Boris Johnson tells LBC