Hm Treasury
Before I begin, can we please take a moment to thank our firefighters, and indeed all our incredible emergency services, toiling as I speak to keep our families, and this city safe.
And spare a thought for those who have tragically lost their homes, and loved ones.
My Lord Mayor, Governor, Pascal, Aldermen, Sheriffs, Ladies and Gentlemen - friends,
It is an immense privilege to be here tonight - my first official speech as Chancellor.
Im humbled to think of the many Chancellors who have addressed this magnificent room and illustrious audience.
And its a testament to the greatness of this country that a boy from Baghdad can stand before you tonight, the latest in that long line.
Tonight, I want to speak about the global fight against inflation.
About the need for private sector growth.
And about the critical role of financial services.
But I want to start by acknowledging the elephant in the room.
For as I speak, the country is gripped by a great national contest.
All eyes are on the runners and the riders
The pacts and the plotting
The tears and the tantrums.
And I for one cannot wait to see who wins Love Island.
And to those contestants knocked out in the early rounds
let me just say this:
I know how you feel.
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In all seriousness, I said I wouldnt intervene in the leadership contest.
And thats not about to change tonight.
The one thing I will say is this.
Over the next few weeks, the arguments will be heard, the candidates will be tested, and a choice will be made.
At the end of that process a new Prime Minister will walk through that famous front door.
He or she will do so without a shot being fired or troops on the streets.
When you have a background like mine, my friends, you appreciate what an incredibly precious thing that is.
Peaceful political competition is one of our countrys greatest strengths.
A few weeks of uncertainty is the bargain price we pay for that freedom.
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So yes, there is short-term uncertainty. But the governments work continues.
My main message tonight is this:
We are steadying the ship.
We are stabilising the economy.
We are getting on with the task at hand.
Because there are huge challenges ahead.
And its why I took this role, and why I wanted to be here tonight.
This summer, my focus will be on providing stability, reassurance, and continuity:
On Friday, I spoke at the G20, along with the Governor
to make progress with our international partners on critical issues from energy to food security
and to express, of course, our unwavering support for Ukraine.
On Thursday, we made the first of two payments to eight million of the most vulnerable people in our country.
And the Thursday before that
we introduced the biggest personal tax cut in a decade
giving 30 million people a tax cut worth up to 330 a year.
So make no mistake, we are getting on with the job.
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And we cannot do that without all of you here one of our most important sectors, financial services.
From credit unions to credit brokers, from FinTech start-ups to high street banks
when we work together, in partnership, we can achieve a lot:
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Through Covid, you helped deliver government schemes to millions of people and made sure essential banking services continued.
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You are supporting our recovery with new investments, lending, and innovation to keep the economy moving ahead.
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And in response to Russias barbaric invasion of Ukraine, you have implemented one of the most stringent sanctions regimes ever devised.
At a time when freedom is under assault from Putin and his regime
we must do everything we can to support the Ukrainian peoples proud struggle against invasion.
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So, in uncertain times, and challenging times, the Government, in partnership with the finance sector, is providing stability, reassurance, and that important continuity.
As we do so, I want to take just a few minutes to tell you about three priorities for the coming months:
First, we are delivering a coordinated, responsible approach to controlling inflation.
Second, we are delivering our promise to create the conditions for a private sector recovery.
And third, we are delivering our vision for financial services working in partnership with the industry.
Let me take each in turn.
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So first, My Lord Mayor,
It was clear at last weeks G20 that the most pressing problem facing the global economy is inflation.
Finance Ministers and Central Bank Governors around the world are grappling with the same series of shocks.
Global supply chains are disrupted in the worlds manufacturing centres, like China.
Thats been made worse by an initial shift in global demand from services to goods, especially in the United States of America.
And, even with some signs of supply pressures easing, Putins war is still causing spikes in energy and food prices.
These challenges have caused an extraordinary inflation shock, around the world, on a scale weve not seen in decades.
And increasingly, they are beginning to create the risk of global growth slowing.
For us, as a net importer of energy and goods higher prices are hitting the United Kingdom hard.
In May, CPI crept above 9% for the first time in 40 years.
And we must brace ourselves for it to rise further, with the Bank forecasting inflation to reach slightly above 11%, later this year.
And if we look beneath the surface, we must never forget that inflation is deeply regressive.
The ONS has said that the lowest income families spend almost twice as much of their household budget on energy and food, as the higher income families do.
Those most affected by higher prices are almost always the least able to afford them.
So protecting the country from the causes and consequences of rising inflation isnt just a technocratic exercise.
It is a moral imperative.
What, then, are we doing to address these inflationary pressures?
The job of controlling inflation falls, of course, to the Bank of England.
They are independent and rightly so.
The Governor will say more about their strategy in a moment.
But let me just say:
They have a strong track record.
They have all the tools they need.
And I know they have complete determination to do what is required. Andrew, I thank you.
But the Bank is not alone.
Government has a role and a responsibility in this fight.
Our actions too can have a bearing on inflation.
That means delivering sound public finances, carefully designed to avoid adding to inflationary pressures.
while still providing help for households with the worst impacts of inflation.
And we are accepting, in full, the recommendations of the independent Pay Review Bodies for public sector workers.
We are finding a careful balance: Providing the highest uplifts in nearly twenty years, without making inflationary pressures worse.
And Governments role goes beyond fiscal policy.
Where we can, we must also ease the supply constraints that are so often the underlying cause of higher inflation.
Take the labour market, for instance.
The latest statistics just this morning show:
Unemployment near 50-year lows
Employment has risen
And, importantly, inactivity has fallen.
Yet with more vacancies than there are people to fill them
we are looking at what more we can do to encourage people into the labour market
particularly the 250,000 or so people who left their jobs during the pandemic
as well as creating a more competitive migration regime, especially for high-skilled migrants.
Something I know matters a lot to the people in this room.
And, above all, we are easing the supply side of our economy by delivering our Energy Security Strategy.
Reinvigorating our nuclear sector
massively expanding renewables
and giving a new lease of life to the energy fields of the North Sea.
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And I saw as Vaccines Minister the incredible importance of that close relationship between Government and regulators.
So Andrew and I are coordinating closely.
With the independent Bank of England acting to control inflation.
And government keeping close control of the public finances, supporting households, and easing the supply side.
We are doing everything we can to make sure expectations for higher inflation dont become embedded.
And you will hear the same message tonight from the Chancellor and the Governor, speaking together, on the same platform:
The country should feel confident that we can, and we will, get inflation back under control.
My Lord Mayor, controlling inflation is a necessary part of rebuilding our economy but on its own, it is not sufficient.
To do that, Britain needs growth.
Thats my second priority: to create the conditions for the private sector, supported by financial services, to grow the economy.
My background is in business. I know the value of entrepreneurship, start-ups, and innovation.
I know where the best ideas, the most sustainable growth, the new jobs, the higher wages, are going to come from.
Its from the wealth creators and r