The Bank of England opted to raise interest rates for a 14th consecutive time to a new 15-year high of 5.25 per cent on Thursday, inflicting further pain on mortgage holders and other borrowers as it seeks to stem rising prices.
Despite the central bank’s new forecasts suggesting that interest rates will remain above 5 per cent for at least two years, they also brought good news for the prime minister by indicating that he will hit his key target of halving inflation by the end of the year.
But the fragility of the UK economy will weigh heavily on Mr Sunak’s mind as he is said to be planning his second reshuffle since entering No 10.
According to The Times, colleagues are said to believe Mr Hunt is “unsackable” as chancellor, following the market chaos sparked by the turbulence of his predecessor Liz Truss’s disastrous mini-Budget, which saw her fire her chancellor and close political ally Kwasi Kwarteng.
Mr Sunak is understood to be weighing up whether to “signpost” future tax cuts in the autumn – being aware of the need for a significant “gear change” despite being insistent that there will be no tax cuts this year, the paper reports.
Talk of a reshuffle first began in the run-up to last month’s triple by-election challenge sparked by Boris Johnson’s exit from parliament. The Tories lost two of three seats after defence secretary Ben Wallace announced his intention to leave politics at the next election.
Mr Sunak is expected to make limited changes, according to The Times, which links Michael Gove to the role of health secretary and reports that the PM is keen to promote “rising stars” to the lower ranks of ministers of state, in an attempt to build a new-look “election-ready” Cabinet.