Liz Truss’s Economic Guru Says Her Tax Plans Will Send Interest Rates Soaring

Liz Truss’s plans to cut taxes would lead to interest rates rising to up to seven per cent, according to her economic guru.

Professor Patrick Minford said higher rates – which would send monthly mortgage repayments soaring – were “a good thing” for the economy.

At the moment, the Bank of England interest rate is 1.25 per cent.

Earlier this week, Truss said Minford supported her plans to reverse the increase in national insurance and halt a planned rise in corporation tax, despite warnings they could lead to higher inflation.

Former chancellor Rishi Sunak, Truss’s rival for the Tory leadership, has insisted that taxes should only come down once inflation is under control.

But in an interview with The Times, Minford said: “If we raise corporation tax we’ll kill off growth.

“It’s crazy to try to begin getting the debt-to-GDP ratio down five minutes after Covid. Borrowing is actually something that allows you to pursue the right policies and not be blown off course by temporary shocks.”

On warnings that tax cuts will lead to higher interest rates to bring down inflation, he said: “Yes, interest rates have to go up and it’s a good thing.

“A normal level is more like 5-7 per cent and I don’t think it will be any bad thing if we got back to that level.”

Minford added: “If you’ve got incredibly low interest rates you kill off savings and create febrile markets with a lot of zombie companies surviving because it costs them nothing to borrow.

“It’s right that a healthy economy should have a decent interest rate. That’s certainly one thing I want to see.”

A Truss campaign source told The Times: “Patrick Minford has no formal involvement in Liz’s campaign.

“Liz’s absolute priority is tackling the cost of living and getting our economy growing faster. We can’t have business-as-usual economic policy.”

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Boris Johnson Resigns From ‘The Best Job In The World’

Boris Johnson said he was “giving up the best job in the world” as he announced he was resigning as prime minister.

The outgoing premier also spoke of the “pain” he felt at having been forced out by his MPs.

He said it was “clearly the will of the parliamentary Conservative Party that there should be a new leader of that party and therefore a new prime minister” and that the leadership contest to choose his successor had now begun.

Speaking directly to the British public on the steps of 10 Downing Street, he said: “I want you to know how sad I am to be giving up the best job in the world, but them’s the breaks.”

Johnson was applauded by around 30 supportive MPs, as well as his wife Carrie and Downing Street aides as he made his way from the front door of No. 10 to the lectern in the street outside.

In an at-times graceless speech, Johnson made clear his anger at being dumped by his own party less than three years after winning an 80-seat majority.

He said: “In the last few days, I tried to persuade my colleagues that it would be eccentric to change governments when we’re delivering so much and when we have such a vast mandate and when we’re actually only a handful of points behind in the polls, even in mid-term after quite a few months of pretty relentless sledging and when the economic scene is so difficult domestically and internationally.

“I regret not to have been successful in those arguments and of course it’s painful not to be able to see through so many ideas and projects myself.

“But as we’ve seen, at Westminster the herd instinct is powerful, when the herd moves, it moves.

“And my friends in politics, no one is remotely indispensable and our brilliant and Darwinian system will produce another leader, equally committed to taking this country forward through tough times.”

He added: “I want to say to the millions of people who voted for us in 2019, many of them voting Conservative for the first time, thank you for that incredible mandate, the biggest Conservative majority since 1987, the biggest share of the vote since 1979.

“And the reason I have fought so hard in the last few days to continue to deliver that mandate in person was not just because I wanted to do so, but because I felt it was my job, my duty, my obligation to you to continue to do what we promised in 2019.

“And of course, I’m immensely proud of the achievements of this government.”

The PM went on: “I know that even if things can seem dark now, our future together is golden.”

The prime minister also confirmed he plans to stay in office until a new leader is elected, which may not be until the autumn.

Despite Johnson’s insistence that he will stay on until a new leader is in place, angry Tory MPs have demanded he go straight away, a move which would likely see deputy PM Dominic Raab take the reins until a new leader is in place.

North West Leicestershire MP Andrew Bridgen told HuffPost UK: “He’s lost the confidence of the party and he’s lost legitimacy to stay in office – leave means leave.

“If he stays we will be mired in further scandal and sleaze allegations throughout the summer, which will distract from government and the leadership election.

“It’s all about Boris Johnson – it’s not about the the party or the country. He’s not fit to remain in office a moment longer.”

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Senior Tory MP Accused Of Rape Will Not Be Suspended From Party

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Tory MPs Demand Dominic Cummings Resign Over Lockdown Row

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Watch As Anti-Boris Johnson Protesters March Against Election Result

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Conservative HQ Knew Exactly What It Was Doing When It Rebranded Its Press Account

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Are Boris Johnson Or Jeremy Corbyn Doing Enough To Win Over The Public?

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All The Disastrous Things That Happened During The First Week Of The Election Campaign

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Philip Hammond To Quit Parliament At General Election

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David Cameron Says Boris Johnson Was Wrong To Suspend Parliament To Ram Through No-Deal Brexit

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