Jeremy Hunt tells Brits to be ‘patient’ as sticky inflation causes more turmoil and insists gov must stay firm

JEREMY Hunt today urged Brits to be patient with the economy as new figures showed inflation has stagnated.

The Chancellor promised that the government will "stick to its guns" by making tough choices to bring the figure down.

In a blow to households, inflation remained at 8.7% in May compared to April.

The Office for National Statistics (ONS) said rising prices for air travel, recreational and cultural goods and services, as well as second-hand cars, caused the figure to stay high.

The falling price of motor fuel led to inflation slowing, while food and non-alcoholic drinks rose in May but less than in May 2022.

However, core CPI inflation, which excludes energy, food, alcohol and tobacco, stood at 7.1% in May, up from 6.8% in April.

Tomorrow the Bank of England is likely to hike its base rate from 4.5%.

Markets are expecting the figure to rise by 0.25% points to 4.75% in an effort to curb inflation.

Mr Hunt said: "If you look at what's happening in other countries, you can see that rises in interest rates do bring down inflation over time.

"That will happen here but we need to be patient, we need to stick to the course and then we'll get to the other side."

This morning one of the Chancellor's economic advisors called for the Bank of England to "create a recession".

JP Morgan's Karen Ward told Radio 4 there are "certainly signs" price-wage spiral is emerging and the bank "has to nip in the bud".

"They have to create uncertainty and frailty," she said.

"It's that weakness in activity which eventually gets rid of inflation."

Ms Ward added bank chiefs have "been too hesitant" about raising rates.

However, soaring interest has left some homeowners struggling to with mortgages.

The average rate on a two-year fixed deal has now soared to 6.01 per cent.

And a typical five-year fixed deal is 5.67 per cent.

New research from the Institute for Fiscal Studies today found 1.4 million people are set to lose 20% of their disposable income after rates rise.

On average, mortgage holders will see repayments hiked by £280 per month – equivalent to 8.3% of disposable income.

The biggest rise will hit homeowners in their 30s, with payments jumping by £360 per month, or 11% of disposable income.

The government this week ruled out direct cash boosts to help with mortgage repayments, arguing it would be counterproductive to efforts to strangle inflation.

It would also put ministers at odds with the Bank of England, who the Chancellor insists he's in lock-step with.

Mr Hunt said: "We know that there is enormous pressure for families' mortgages and it's a really big deal for family finances.

"The one thing that would not help those families is to step in with short-term support that meant that inflation stayed higher for longer and those mortgage rates stay higher for longer.

"I'm meeting the mortgage lenders later this week to ask what else can be done to relieve pressure in very difficult times.

"But we won't do anything that means that high inflation stays around for longer because that is the root cause of the pressure."

The Chancellor vowed that the Treasury will "stick to its guns".

"No matter what the pressure from left, right or centre, we won't be pushed off course," he said.

"Because if we are going to help families, if we are going to relieve the pressure on people with mortgages, on businesses, we need to squeeze every last drop of high inflation out of the economy."