Chancellor responds to the Bank of England's Monetary Policy Report

The Chancellor's response to the Bank of England's Monetary Policy Report August 2022 is below:

Chancellor of the Exchequer, Nadhim Zahawi said:

“Along with many other countries the UK is facing global economic challenges and I know that these forecasts will be concerning for many people.

"Addressing the cost of living is a top priority and we have been taking action to support people through these tough times with our £37 billion package of help for households, which includes direct payments of £1,200 to the most vulnerable families and a £400 discount on energy bills for everyone.

"We are also taking important steps to get inflation under control through strong, independent monetary policy, responsible tax and spending decisions, and reforms to boost our productivity and growth. The economy recovered strongly from the pandemic, with the fastest growth in the G7 last year, and I’m confident that the action we are taking means we can also overcome these global challenges.”

Notes to editors

Additional info:

• The Chancellor will speak with the Governor of the Bank of England this afternoon about how they will continue to work together to bear down on inflation and address the currently economic situation.
• There are a range of forecasts produced by many different organizations. The Bank of England have noted the uncertainty in the outlook and the OBR will update their view of the outlook in the autumn in the usual way.
• Global factors are affecting the economic outlook in the UK. The Bank of England highlight that the outlook for world activity has deteriorated materially following Russia’s invasion of Ukraine. To date, high global energy and commodity prices and problems with international supply chains have driven up inflation. In recent months actions by Russia to reduce gas flows through Nord Stream, and other pipelines, have further driven up global gas prices.
• More recently, domestic factors have also started to play more of a role, including because we have a low rate of unemployment which – while definitely good news – does          contribute to our relatively high rate of inflation.
• The government took decisive action to protect the economy during the pandemic, which led to the fastest recovery in the G7 last year.
• The Plan for Growth set out our plans to drive economic growth through significant investment in infrastructure, skills and innovation. We have already taken important steps to encourage growth, including through the landmark capital uplift at Spending Review 2021 of £150 billion a year in cash terms by 2024-25 and increasing public investment in R&D to £20 billion per year by 2024-25.
• Government support for the cost of living factsheet: https://www.gov.uk/government/publications/government-support-for-the-cost-of-living-factsheet/government-support-for-the-cost-of-living-factsheet
• Millions of households across Great Britain will receive a £400 non-repayable discount on their energy bills this winter through the Energy Bills Support Scheme. The £400 discount, administered by energy suppliers, will be paid to consumers over 6 months with payments starting from October 2022, to ensure households receive financial support throughout the winter months.