Truss defends Government record amid concerns about rising interest rates

Liz Truss has said the Government will do “what we can” to support households over the coming months, amid growing concerns about the pressure rising interest rates will put on millions of people across the country.

The Prime Minister insisted that her Government would be there to help households through the cost-of-living crisis, but also pointed to her and the Chancellor’s dash for growth as the antidote to some of the problems facing the country.

But Ms Truss, who in recent days has been forced into two major U-turns amid backbench outcry over Kwasi Kwarteng’s mini-budget, offered no specific reassurances for households who could be facing a steep rise in interest rates in the weeks and months to come.

Speaking to broadcasters as she attends a fractious Conservative Party conference, she said the Government would do “what we can to help people”.

Asked if the Government might be able to help struggling households, she acknowledged that people are “worried” about the cost of living and rising inflation, but once again said that interest rates were a decision for the Bank of England.

There is an expectation that the Bank of England could feel compelled to step in with another interest rate rise in the weeks to come, following the Chancellor’s mini-budget last month, in order to further calm the markets.

Such a move would only add further pressure to homeowners and those trying to buy a house.

Ms Truss defended the measures her administration had taken so far on the cost of living.

“That’s why we have acted decisively on the energy price guarantee. We’re also doing what we can to help homeowners through stamp duty reductions. The reality is, though, that interest rates are set by the independent Bank of England. They make those decisions on the basis of what’s happening with inflation and other factors. The energy intervention that we have done is likely to curb inflation by up to five points so that has a positive effect.

“But ultimately, what we’re seeing around the world in the wake of (Russian President Vladimir) Putin’s war in Ukraine is interest rates rise. So the Federal Reserve, for example, has pushed up interest rates, so we will do what we can to support people. But ultimately, it is a decision for the independent Bank of England.”

Ms Truss, asked again if households could expect support, said: “I understand it’s a very, very worrying time for people. Let’s remember where we were four weeks ago, people were facing energy bills of up to £6,000.

“We’ve helped with those energy bills across the board. We’ve helped businesses who could face going out of business through a business energy scheme as well and we’re also reversing the increase in national insurance to put more money back in people’s pocket.

“So yes, these are difficult times but we will do as a Government what we can to help people get through at the same time as making sure we’re building the positive economy of the future, because ultimately it’s economic growth is going to deliver the higher wages, the greater opportunities for people that are going to enable us to succeed in the future.”