Prime Minister and Chancellor on vacation as Bank of England warns UK to be hit by recession

Both Boris Johnson and his Chancellor Nadhim Zahawi are on vacation as the Bank of England raised interest rates for 27 years and warned of the longest recession since the financial crisis.

The government is facing calls for urgent action to combat rising energy prices after Bank of England Governor Andrew Bailey raised interest rates from 1.25% to 1.75%the biggest increase since 1995, in an attempt to control runaway inflation.

The Bank’s Monetary Policy Committee (MPC) predicted an inflation peak of 13.3% in October, the highest in more than 42 years.

He warned that dire economic conditions will cause real household incomes to fall for two consecutive years, the first time this has happened since records began in the 1960s.

But when the bleak economic outlook was revealed, both the prime minister and the Mr Zahawi were away from Westminster on vacation.

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The chancellor is believed to be working remotely while he is away for a few days.

“There is no holiday and not working,” said the chancellor.

“I never had that in the private sector, nor in the government. Ask any business owner and they’ll tell you.

“Millions of us dream of running away with our families, but the privilege and responsibility of public service means you can never hang up, which is why I get calls and briefings every day and continue to do so.”

The prime minister’s official spokesman confirmed last week that Johnson will go on vacation from Wednesday, despite having just over a month in office.

O Prime Minister will remain in charge of the country, receiving updates as needed, he told reporters.

Downing Street did not give details of where the prime minister would spend his annual vacation until the end of the week, and insisted he would still be running the country.

Asked who would be in charge while Johnson was away, the prime minister’s official spokesman said: “It will be the default pattern.

“The prime minister will be updated as needed. The deputy prime minister and, as always with a cabinet government, other ministers, will be on hand to support as needed.”

However, Mr. Zahawi responded to the Bank of England’s announcement.

“Along with many other countries, the UK is facing global economic challenges and I know these predictions will be worrying for many people,” the chancellor said.

“Addressing the cost of living is a priority and we are taking steps to support people in these difficult times with our £37bn aid package for families, which includes direct payments of £1,200 to the most vulnerable families and a rebate of £400. on energy bills for everyone.

“We are also taking important steps to control inflation through strong and independent monetary policy, responsible tax and spending decisions, and reforms to increase our productivity and growth.

“The economy has rebounded strongly from the pandemic, with the fastest growth in the G7 last year, and I am confident that the actions we are taking mean that we too can overcome these global challenges.”

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The Treasury later released a reading of a call Zahawi had with the Governor of the Bank of England on Thursday afternoon, who said the two discussed the actions they are taking to combat high inflation and overcome the economic challenges facing him. the country faces.

Energy Minister Greg Hands said the government was working “full steam ahead” on what was the ministers’ “number one priority”, despite Johnson and Zahawi being far from Westminster.

Pressed on how the prime minister and chancellor can work abroad, Hands replied: “Because we have already made the decisions in terms of the support package that is in place at the moment.

“Several of these measures are yet to come – such as support for the £400 account that will start in October, such as payments to disability benefits that will start in September.

“So all this is generating a series of support measures for consumers and bill payers.

“But this situation will remain under constant review and I’m sure whoever the next prime minister is, that will absolutely be the number one priority, as it is for the current and current prime minister.”

Labor leader Sir Keir Starmer is also on vacation.

But Rachel Reeves, shadow chancellor, said the forecast was “further evidence that the Conservatives have lost control of the economy.”

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