The Prime Minister has been accused by the SNP of “patronising the public” when suggesting people should “hold their nerve” on rising interest rates.
Rishi Sunak was facing Prime Minister’s Questions for the first time since the Bank of England rose interest for a record-breaking 13th time in a row to 5%.
The increase in the central bank’s base rate means it is at the highest level in 15 years and comes after warnings the hike could see 1.4 million mortgage holders lose at least a fifth of their disposable income – with those aged between 30 and 39 the worst hit.
During PMQs, SNP Westminster leader Stephen Flynn told the Commons: “On Sunday, the Prime Minister patronised the public when he told them that in the face of ever-increasing mortgage bills that they simply need to ‘hold their nerve’.
“What a nerve. So may I ask him, the near-billionaire, when was the last time that he struggled to pay a bill?”
Prime Minister Rishi Sunak said: “The reason that mortgage rates are rising is because of inflation. That is the root cause, which is why it’s absolutely the right policy to tackle, halve inflation and reduce it back to target.
“Now, that does mean that we do have to make difficult decisions. It does mean we have to be patient while the impact of those decisions actually has an impact.
“But in the meantime… we are taking practical steps to support mortgage holders across the United Kingdom, particularly through the SMI (Support for Mortgage Interest) scheme and the new mortgage charter.”
The Bank of England has a target to try to get the rate of inflation to around 2%.
In order to drag inflation down quickly, the most commonly used policy tool used by the Bank of England is increasing the base interest rate.
The Prime Minister accused the SNP of “complete economic illiteracy”.
Flynn said: “This Prime Minister is out of touch, and the Tory Party is soon to be out of time.
“And what the public really want is change. But in a week where the Conservative Party and indeed the Labour Party both refused to accept proposals for public sector pay rises whilst at the same time accepting the economic damage of Brexit, is it not the case that Westminster does not offer the people real change nor real hope for the future?”
Rishi Sunak responded: “The honourable gentleman just exposes the complete economic illiteracy of the SNP position. His first question talks about the challenges posed on ordinary families by higher interest rates caused by higher inflation.
“What does his next question do? Support a policy that would increase Government borrowing and make the situation worse.
“It just demonstrates completely candidly why the SNP’s approach to economic management is simply not fit for anyone in the United Kingdom.”