The dreaded R-word is being whispered in Whitehall

With inflation soaring and families facing the worst income squeeze since the oil price shock of the 1970s, the calmer waters Sunak hoped for could be replaced by a tsunami, writes Andrew Grice

A typical household will see their income fall by £1,000 this year (PA Wire)

“We are about to find out who the real Rishi Sunak is,” a former minister told me. The chancellor had planned to make a bland spring statement on 23 March to symbolise a return to normal politics after the coronavirus pandemic – which, in his eyes, includes public spending restraint. But the backdrop to his Commons statement has changed dramatically after Russia’s invasion of Ukraine. The new normal is anything but.

Although Boris Johnson loves to trumpet that the UK has the “fastest growth in the G7,” the dreaded R-word – recession – is being whispered in Whitehall. With inflation soaring and families facing the worst income squeeze since the 1970s, the calmer waters Sunak hoped for could more resemble a tsunami. A typical household will see their income fall by £1,000 this year as food, petrol and energy price rises bite.

Despite that, the chancellor is resisting calls from some cabinet ministers, including Kwasi Kwarteng, the business secretary, to expand the £9bn package announced last month to cushion the rise in domestic energy bills. It would have to be raised by £12.5bn to achieve the same level of support because the energy price cap could now rise to £3,000 a year in October.