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In an interview with Sky News’s Kay Burley last night (4 August), foreign secretary Liz Truss claimed she could avert a recession if she wins the leadership contest.
The claim comes after the Bank of England projected that the UK would enter a recession in this year’s fourth quarter, with the recession predicted to last up to five quarters in total, or over a year.
During the Sky News leadership debate, Truss promised immediate tax cuts if she becomes prime minister, alongside claims that the predicted recession could be avoided.
Truss said: “What the Bank of England said today is of course extremely worrying but it is not inevitable. We can change the outcome and we can make it more likely the economy grows. What’s important is first of all that we need to help people struggling with the cost of living.
“I would immediately reverse the national insurance increase. I would also have a temporary moratorium on the green energy level to save people money on fuel bills. I would also keep corporation tax low to make sure we are attracting investment into our economy and doing what we can to avoid a recession.”
She added: “It’s so important we keep taxes low and we do all we can to grow the economy by taking advantage of our post-Brexit freedom, unleashing investment, changing things like the procurement rules and doing things differently. Now is the time to be bold, because if we don’t act now we are headed for very difficult times.”
In response, however, Sunak argued that Truss’s plans would worsen inflation.
He said: “We in the Conservative party need to get real and fast. The lights on the economy are flashing red and the root cause is inflation…I’m worried that Liz Truss’s plans will make the situation worse.”
After the Sky News debate last night, the audience of Tory members, on a show of hands, favoured Sunak over Truss.
