Bank of England shows choice for Tories is lower taxes with Truss or lower interest rates with Sunak

ITV News Deputy Political Editor Anushka Asthana reports on the differing strategies the two Tory leadership candidates have on how to grow the economy as a recession looms in the distance

"It is not for the Bank of England to get involved in the leadership election ... we condition on the fiscal policy as announced," Andrew Bailey, governor of the Bank of England has told ITV News' Joel Hills.

What he means is that the interest rate rise of 0.5% has been conditioned by Rishi Sunak's recent initiatives to help with the cost of living, which Liz Truss says are inadequate.

So the governor is saying that if she implements her promised significant fiscal stimulus, interest rates would rise more than they would otherwise do, all other things being equal.

In fairness to Ms Truss, those other things might not be equal, but the governor has said nothing to undermine Mr Sunak's charge that a Truss stimulus would be offset by a proportionately greater rise in interest rates.

So for Tory members, the choice for their leader and the UK's prime minister would be between lower immediate taxes with Ms Truss or lower immediate interest rates with Mr Sunak.

And for the avoidance of doubt, neither Mr Sunak or Ms Truss are promising anything that would persuade the Bank of England the UK can escape a significant recession, a significant contraction in national income, this year.

The question is the distributional one, or which British people will suffer the most.

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