Economy woes will see Tories do battle over tax cuts as election time looms | Analysis by Sky's tamcohen
Forecasters predicted inflation would tumble this year, and the prime minister decided to own it, despite many of the factors being out of his control.
With another hike in interest rates expected tomorrow, the chancellor is backing the Bank of England as they try to - in his words yesterday -"strangle inflation". He is batting away louder calls for direct mortgage relief or tax cuts. Last month, Mr Hunt told Sky News' Ed Conway that he would support a rise in interest rates north of 5% -"even if that would precipitate a recession" - to bring down inflation.
In the Treasury, sources say fiscal support for people with mortgages could be disastrous and the chancellor must stick the course - but it could take far longer than hoped.
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