One of the key questions hanging over Westminster this morning (30 May) is whether Rishi Sunak’s mini-budget will be enough to protect people from the financial turmoil of the cost-of-living crisis.
Sunak announced a £15bn (that’s a big number) package on 26 May that provided one-off payments to all households as well as extra support for some of those receiving benefits. The package will be funded through £10bn in borrowing as well as a windfall tax on the energy and gas companies, which is estimated to raise £5bn. The government will hope the £10bn net injection into the economy will get people spending and stimulate some growth. But it also risks worsening inflation. That will put pressure on the Bank of England to raise interest rates to counteract any inflationary rise, which in turn will increase the risk of recession.
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