Campaign Update: Interest Rates Day

Good Thursday Morning. There are 30 days left of the Tory leadership campaign.

Today’s new policy:

  • Both candidates lead this morning with preemptive responses to today’s Bank of England interest rate decision
  • Liz leads by countering Rishi’s usual attack line, once again emphasising her argument that “Modest tax cuts – including scrapping a potentially ruinous corporation tax rise that hasn’t even come into force – are not inflationary”
  • Liz also argues “The way to tackle the cost of living crisis is by growing the economy and delivering as much immediate help to people as we can. We cannot tax our way to growth. My economic plan will get our economy moving by reforming the supply side, getting EU regulation off our statute books, and cutting taxes.”

In other news:

  • Truss has another big-name backer in the shape of Sajid Javid. Javid came out for Liz with an increasingly typical attack of her opponent’s record in No. 11, saying the UK is “sleepwalking into a big-state, high-tax, low-growth, social democratic model”. He’s out batting for her on the Today programme this morning.
  • Following the husting, Liz scored the first elected defector of the campaign – MS James Evans – who tweeted that after backing Rishi to begin with he’s now in Camp Liz
  • Sajid’s announcement came less than 20 minutes after the latest Conservative Home poll, which gives Liz a 32-point lead over Rishi. Almost identical to YouGov’s 34% lead yesterday…

Also:

  • Tony Blair’s former head of operations, 2005-07, wrote an op-ed warning Labour over the threat Truss poses to his party, with a number of very complimentary appraisals of Truss’s skill set
  • Truss came under limp-wristed fire that her chartering of a private helicopter for the campaign undermines her promise of Net Zero by 2050. Unfortunately, these attacks came from Sir Ed Davey’s LibDems, who don’t have a leg to stand on when it comes to questionable trips in helicopters.

Today’s new policy:

  • Like Liz, Rishi’s also focusing on the Bank of England’s rate decision tomorrow
  • Rishi repeats his attack line of “If we rush through premature tax cuts before we have gripped inflation all we are doing is giving with one hand and then taking away with the other.”
    • “That would stoke inflation and drive up interest rates, adding to people’s mortgage payments.”
  • Team Rishi warns that a 1 percentage point increase in interest rates costs approximately £11 billion a year. If, “as is widely expected” the BofE increases rates by 0.5pp, this will cost £5.5 billion

Also:

  • Some have leapt on Rishi’s comments yesterday that cutting Inheritance Tax is “of course” “Something we should look at” as a hint this is now Sunak policy.

In other news:

  • Finally got an endorsement from Nigel Lawson himself, who writes in The Telegraph that Rishi is “the only candidate who understands Thatcherite economics”
    • “we should stick to the path that Rishi Sunak set as chancellor and look to embrace long-term tax reform as a prerequisite to long-term improvements in competitiveness”
    • “While Liz Truss has many qualities, her plans now reportedly comprise approximately £60 billion of unfunded spending/tax cuts – and her message of reassurance about the associated inflationary risk is, to me, uncomfortably reminiscent of the missteps of the Tory government of 50 years ago.”
  • Michael Howard opened for Rishi at Wales’ Tory husting last night, saying he can provide the leadership needed “not only in this country, but across the wider western world”

Bookies Odds (Previous in Brackets):

  • Liz Truss 1/12 (1/14)
  • Rishi Sunak 11/2 (13/2)

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