Soaring inflation could tank Rishi Sunak’s Tory leadership bid

Wages are rising. The economy is growing. The stock market is on the way up, and exports are booming. As he prepares for a long summer trying to persuade the membership of the Conservative party to make him prime minister, Rishi Sunak probably wishes he could be transported to some parallel universe where he could boast about his record as Chancellor. The trouble is, he is stuck with this one: and the news is relentlessly bad.

This morning, inflation was up yet again, hitting a 40-year-high of 9.4 per cent. Yesterday, it was real wages falling sharply, as workers' income failed to keep up with rising prices. Over the next six weeks, as Sunak is out on the hustings hustling for votes, it is only going to get worse and worse. We are likely to see a fall in GDP (people taking a couple of days off because of the heat won't have helped output); a record trade deficit, exceeding even last month's terrible figures; a steep rise in interest rates making mortgages more costly; and a falling pound, making holidays more expensive. Put simply, it's all doom and gloom.

It's true that this is not necessarily Sunak's fault. The entire global economy is in trouble. And the UK may well be in better shape than many of its rivals and will bounce back quite quickly. But it won't happen over the summer.

In reality, Sunak will be running for the leadership with arguably the worst record of any Chancellor since Ted Heath's finance minister Tony Barber in the early 1970s (and possibly even worse). It is hardly an enviable task. And it will undermine his claim to be the sensible, safe pair of hands.

Sunak could break free of this dire reputation. He could easily blame the tax rises and the wild spending on Boris Johnson, and he could blame the Bank of England for printing too much money. Sunak could also pledge to ditch at least one of the tax rises he imposed on the economy (the crazy rise in corporation tax would be the obvious one to start with) and set out some bold and detailed plans to control the size of the state and steadily bring taxes down. But so far he has refused to do so. Instead he seems stuck in a 2020 'dishy Rishi' time warp where giving away vast sums of printed money was briefly mistaken for economic brilliance. In reality if Sunak chooses to run on his record at No. 11, he will certainly lose – and rightly so.