Jeremy Hunt rules out mortgage support and capping food prices
The chancellor has ruled out mortgage bill support for fear it would increase inflation.
Answering questions in the House of Commons, Jeremy Hunt told MPs that “schemes which involve injecting large amounts of cash into the economy, right now will be inflationary”.
Despite expressing sympathy for people with higher mortgage costs he said, “we won’t do anything that would mean we prolong inflation“.
He had been asked by Tory MPs about reintroducing a “bold Conservative idea” of mortgage interest relief at source, otherwise known as Miras, a 1980s policy that gave mortgage holders tax relief on their interest payments.
Both Mr Hunt and the economic secretary to the Treasury, Andrew Griffith, said such a policy introduction would worsen inflation.
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How will mortgage rises affect you?
Instead, Mr Hunt said he would meet the main mortgage lenders later this week, to ask them what help and flexibility they can offer to those struggling with expensive mortgages and householders in arrears.
The answers echo statements from Prime Minister Rishi Sunak and from Treasury sources who said the government goal of halving inflation would be derailed by financial supports for mortgage bills.
Mortgage payments have been consistently rising, particularly since May, when the consumer price index method of assessing inflation did not come down as far as expected and core inflation – the rate of price rises excluding the volatile food and energy sectors – increased to a 30-year-high.
As a result, it’s expected interest rates will be even higher than previously thought, as the Bank of England hikes its base interest rate to bring inflation down to 2%. The next likely rise will be made on Thursday.
Mortgage providers are already pricing in that increase in the rates they’re offering and on Monday the interest rate on the average two-year deal rose to 6.01%.
Price caps on food were also ruled out by Mr Hunt in the Commons on Tuesday, following the news that the rate of grocery inflation was 16.5% over the four weeks to 11 June.
“I don’t believe capping prices is the right long term solution”, he said, but added he will be meeting regulators next week, “to talk further about what needs to be done with respect to supermarkets”, he said.
Donald Trump has threatened Russia with more sanctions after a series of deadly strikes across Ukraine, as he said of Vladimir Putin: “What the hell happened to him?”
The US president appeared aghast at the conduct of his counterpart in the Kremlin after drone and missile attacks in Kyiv and other Ukrainian cities left 12 people dead and dozens more injured.
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Speaking to reporters at an airport in New Jersey ahead of a flight back to Washington, Mr Trump said: “I’m not happy with Putin. I don’t know what’s wrong with him.”
“He’s killing a lot of people,” he added. “I’m not happy about that.”
Mr Trump – who said he’s “always gotten along with” Mr Putin – told reporters he would consider more sanctions against Moscow.
“He’s sending rockets into cities and killing people, and I don’t like it at all,” he said.
Ukraine said the barrage of strikes overnight into Sunday was the biggest aerial attack of the war so far, with 367 drones and missiles fired by Russian forces.
It came despite Mr Trump repeatedly talking up the chances of a peace agreement. He even spoke to Mr Putin on the phone for two hours last week.
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Hundreds of drones fired at Ukraine
‘Shameful’ attacks
Volodymyr Zelenskyy has said Ukraine is ready to sign a ceasefire deal, and suggested Russia isn’t serious about signing one.
In a statement after the latest attacks on his country, he urged the US and other national leaders to increase the pressure on Mr Putin, saying silence “only encourages” him.
Mr Trump’s envoy for the country, Keith Kellogg, later demanded a ceasefire, describing the Russian attacks as “shameful”.
Three children were among those killed in the attacks, explosions shaking the cities of Kyiv, Odesa, and Mykolaiv.
Ukrainian siblings Tamara, 12, Stanislav, eight, and Roman, 17, were killed in Russian airstrikes. Pic: X/@Mariana_Betsa
Before the onslaught, Russia said it had faced a Ukrainian drone attack on Sunday. It said around 100 were intercepted and destroyed near Moscow and in central and southern regions.
The violence has escalated despite Russia and Ukraine completing the exchange of 1,000 prisoners each over the past three days.
Donald Trump says he will delay the imposition of 50% tariffs on goods entering the United States from the European Union until July, as the two sides attempt to negotiate a trade deal.
It comes after the president of the European Commission, Ursula von der Leyen, said in a post on social media site X that she had spoken to Mr Trump and expressed that they needed until 9 July to “reach a good deal”.
The US president had last Friday threatened to bring in the 50% tariffs from 1 June, as European leaders said they were ready to respond with their own measures.
But Mr Trump has now said that date has been put back to 9 July to allow more time for negotiations with the 27-member bloc, with the phone call appearing to smooth over tensions for now at least.
Speaking on Sunday before boarding Air Force One for Washington DC, Mr Trump told reporters that he had spoken to Ms Von der Leyen and she “wants to get down to serious negotiations” and she vowed to “rapidly get together and see if we can work something out”.
The US president, in comments on his Truth Social platform, had reignited fears last Friday of a trade war between the two powers when he said talks were “going nowhere” and the bloc was “very difficult to deal with”.
Mr Trump told the media in Morristown, New Jersey, on Sunday that Ms Von der Leyen “just called me… and she asked for an extension in the June 1st date. And she said she wants to get down to serious negotiation”.
“We had a very nice call and I agreed to move it. I believe July 9th would be the date. That was the date she requested. She said we will rapidly get together and see if we can work something out,” the US president added.
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Shortly after, he wrote on Truth Social: “I agreed to the extension – July 9, 2025 – It was my privilege to do so.”
On his so-called “liberation day” last month, Mr Trump unleashed tariffs on many of America’s trade partners. But since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.
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Much of his most incendiary rhetoric on trade has been directed at Brussels, though, even going as far as to claim the EU was created to rip the US off.
Responding to his 50% tariff threat, EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.
“We stand ready to defend our interests.”
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