Rishi Sunak warned that Liz Truss’s economic strategy would hurt the nation, saying that adding “fuel to the fire” would cause “millions of suffering” after she insisted her tax cut could prevent a recession projected by the Bank of England.
Truss, the foreign secretary, used Thursday’s televised debate to warn of “very, very difficult times” without “bold” action, rather than the caution of her rival in the Conservative leadership.
But Mr. Sunak, the former chancellor, hit back, fearing her vision would “make things worse” the day the Bank warned that inflation could peak at 13.3% in October.
Interest rates were raised to their highest level in nearly three decades, from 1.25% to 1.75%, exacerbating problems for mortgage holders before the Bank predicted the economy would plunge into its longest recession since the 2008 financial crisis.
Mr. Sunak told the Sky News debate: “We in the Conservative Party have to act really and quickly because the economy indicators are flashing red and the main reason is inflation.
“I’m worried that Liz Truss’ plans will make things worse.”
He stressed the need to get runaway inflation under control before cutting taxes, adding: “But it all starts with not making things worse.
“Because if we just add fuel to the fire of this inflationary spiral, all of us, all of you, will just have higher mortgage rates, savings and pensions to be eaten away, and poverty for millions.”
Mr. Sunak said that “of course” steps can be taken to counter the recession.
“The recession is not caused by the tax burden. It’s just not right. The cause of the recession is inflation,” he added.
“So I’m not going to take out tens of billions of pounds in loans, put them on the country’s credit card, ask our children and our grandchildren to pay their bills, because it’s wrong. It’s not a responsibility.”
The financial thrust of the fight for Boris Johnson’s seat as prime minister has only been intensified by the Bank’s warnings, as the contenders already have differing strategies as they try to win over Tory members who will pick the winner.
Ms. Truss reaffirmed her pledge to immediately reverse the National Insurance hike introduced by Mr. Sunak when he was in 11th place, as well as cut other taxes to prevent job losses from the recession.
“What the Bank of England said today is, of course, extremely worrying, but it is not inevitable,” she said.
“We can change the outcome and make the economy more likely to grow.
“Now is the time to be bold, because if we don’t act now, we are in for very, very difficult times.”
Mr Sunak is fighting to catch up with Ms Truss after polls showed she was about 32 percentage points ahead of Tory members.
Asked if he would concede the fight at any point, Mr. Sunak replied, “The quick answer is no, and that is because I am fighting for what I truly believe in and I am bringing my ideas across the country.
“I will fight incredibly hard until the last day of this campaign for your every vote.
“The stakes are really high.”
Mr Sunak received some consolation by garnering overwhelming support from members at Sky Studios in West London with a show of hands.
Audiences were divided over Mr Johnson’s legacy, with Ms Truss’s defense of his behavior drawing mixed reactions, and Mr Sunak accused of “stabbing Boris to his advantage.”
Ms Truss declined to say whether she would strip the Tory whip of the outgoing prime minister if a House of Commons inquiry found that he deliberately lied to MPs about the partygate.
She said she “didn’t make any prejudice” about the investigation, before adding, “But by the way, it’s quite clear to me that he wasn’t misleading Parliament.”
Labor shadow minister Conor McGinn used the debate as proof that the Tories, with their “low growth and low wage plans”, could not fix the economic crisis.
“The two succession candidates have no answer to sky-high inflation, skyrocketing electricity bills and the prolonged recession that the Bank of England has warned about,” he said.