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3 November 2022

Pressure mounts for Rishi Sunak as interest rates soar

The Bank of England is expected to increase rates by 0.75 per cent today –the biggest single increase for 30 years.

By Rachel Wearmouth

Rishi Sunak could not afford to give a weak performance at PMQs yesterday. The Bank of England is expected to raise interest rates by 0.75 per cent today, which will be the biggest single increase since Black Wednesday in September 1992. This will push the base rate to 3 per cent – a level not seen since the 2008 financial crisis – and raise mortgage rates for millions.

Experts are predicting the base rate could climb as high as 4 or 5 per cent in the months ahead as the Bank of England begins to tackle inflation. According to a Survation poll for Unite the union, 54 per cent say they cannot, or will have difficulty, paying their bills this year and a third have already gone into debt. Britain is on the edge of a recession. Sunak, who must find £35bn of savings before the Budget on 17 November, is under pressure to announce measures that will help the poorest through the cost-of-living crisis.

The problems are growing for the Prime Minister, who has been in the post only a week. Chief among them is his controversial decision to reappoint Suella Braverman as Home Secretary. The Home Office faces a judicial review over the treatment of people at the Manston processing centre, amid reports of families being held there for weeks in overcrowded conditions.

Sunak’s appointment of Braverman could suggest that he thinks the Conservative Party has enough support from Brexit voters to play divisive culture wars on illegal immigration. If so, he has misjudged the situation. Braverman’s incendiary “invasion” rhetoric backfired spectacularly. Last night Edi Rama, the prime minister of Albania, accused Braverman of “fuelling xenophobia” and “singling out a community”. A YouGov poll for ITV’s Peston revealed that 6 per cent of the public think that the government is doing well on immigration.

During PMQs, Keir Starmer challenged the government on its border control failures – an area Labour has preferred to avoid in the past. Robert Jenrick, the immigration minister, has confirmed that Manston is still holding 3,500 people – which is 2,000 above capacity. Ministers now need to reduce that number and show they have control of the situation.

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Diana Johnson, the chair of the House of Commons Home Affairs Committee, is pressing the government to release the legal advice Braverman was issued about the centre. Labour could force ministers to release the information via a humble address in parliament.

But as the crisis over Suella Braverman shows no sign of abating the question is: how much is Sunak prepared to risk to keep his Home Secretary?

[See also: Higher interest rates mean the end of cheap mortgages]

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