"borrowing your way out of inflation isn’t a plan"
Many have stated that Rishi Sunak’s prediction about Liz Truss’ economic plan has come true.
In August 2022, Sunak warned that it would be “complacent and irresponsible” to ignore the risk of markets losing confidence in the British economy, as wagers against UK government debt sent short-term borrowing costs in the gilt market soaring.
He had said: “There will be a run on sterling. The gilts market will be in freefall. And the FTSE will tumble as global investors take fright and sell off every form of British asset.
“It might take only a few days, or the government might stagger through until the end of September, but before long Liz Truss and her new Chancellor Kwasi Kwarteng will have been forced to call in the IMF to stabilise a collapsing economy.”
Sunak also said during the Channel 4 leadership debate in July that Truss’ economic plan was a “fairytale”.
He said: “The most pressing economic priority for the new prime minister and government is to grip inflation.
“We cannot make it worse, inflation is the enemy that makes everybody poorer, it erodes your savings, it erodes your living standards, it means those of you who have mortgages will see your interest rates go up higher and higher.
“So I don’t think the responsible thing to do right now is to launch into some unfunded spree of borrowing and more debt, that will just make inflation worse, it will make the problem longer.”
Truss replied: “Let’s be clear – we have inflation because of our monetary policy, because we haven’t been tough enough on the monetary supply, that’s the way I would address that issue.”
Sunak hit back: “Liz, we have to be honest, borrowing your way out of inflation isn’t a plan, it’s a fairytale.”
Liz Truss ended up beating Rishi Sunak to become Prime Minister.
Liz Truss can't say she wasn't warned that her plan was a fairy tale.
Rishi Sunak(former Chancellor) – "We have to be honest. Borrowing your way out of inflation isn't a plan – it's a fairy tale." pic.twitter.com/8AerErsXaY
— Haggis_UK ?? ?? (@Haggis_UK) September 26, 2022
But it now seems that Rishi Sunak’s predictions have come true as the pound plummetted to a new low of $1.03.
This came after the government pledged further tax cuts.
While the pound slightly recovered to around $1.08, many are wondering what could have been if Sunak had become Prime Minister instead.
One said: “They about to have me begging for Rishi Sunak back.”
“He was ridiculed for predicting it, but it looks like Rishi Sunak was right.”
Others pointed out how Sunak had directly told journalists:
“If we are not the part of sound money, I don’t see what the point in the Conservative Party is.”
Had a dream last night that Rishi Sunak said during the leadership campaign that “If we are not the party of sound money, I don’t see what the point in the Conservative Party is.” pic.twitter.com/Wuon0ykIae
— Jamie Bartlett (@JamieJBartlett) September 27, 2022
Some people posted articles that previously criticised Rishi Sunak for being too worried about the value of the pound.
Political Editor of Politics Home Adam Payne tweeted an article from August and wrote:
“This piece from August, which accused Sunak of ‘desperate’ warnings about what Truss’ policies could do to the £, is doing the rounds among Conservative MPs, I’m told.
“Tory source, ‘Those who only backed Liz for their career are quickly realising the consequences of their actions’.”
The slump in the pound has led to calls for an emergency recall of Parliament.
Scottish politician Ian Blackford is among those who have written to the PM directly.
I've written to @trussliz demanding an emergency recall of Parliament following the disastrous Tory budget.
The UK economy is in crisis. All of us will pay the price as interest rates, mortgages and the cost of goods rise.
MPs should be in parliament holding the govt to account pic.twitter.com/CUVreF0oZO
— Ian Blackford ????????? (@Ianblackford_MP) September 26, 2022
He tweeted: “I’ve written to Liz Truss, demanding an emergency recall of Parliament following the disastrous Tory budget.
“The UK economy is in crisis.
“All of us will pay the price as interest rates, mortgages and the cost of goods rise. MPs should be in parliament holding the govt to account.”