UK

Rishi Sunak faces tough week with economic data and by-elections

Official figures are expected to show a rise in inflation and a possible recession.

Prime Minister Rishi Sunak
Rishi Sunak Prime Minister Rishi Sunak (Liam McBurney/PA)

Prime Minister Rishi Sunak is entering what could be one of the most challenging weeks of his premiership, with potentially gloomy economic numbers, tricky by-elections and opposition to his Rwanda asylum plan.

His pledges on the economy are at risk, as official figures on Thursday will show whether the UK slipped into recession.

Mr Sunak promised to grow the economy, but if the Office for National Statistics’ (ONS) gross domestic product data for the final three months of last year shows a contraction, it means the UK was in a recession after two consecutive quarters of negative growth.

ONS inflation statistics for January could show a small uptick, in what would be a blow to his goal of curbing price rises.

During a visit to Harrogate on Monday, the Prime Minister acknowledged that recent years had been “undoubtedly difficult”, but insisted the economy had “turned a corner”.

But he declined to say whether entering a technical recession would end the prospect of further tax cuts.

“At the start of this year I really believe the economy has turned a corner and we are heading in the right direction.” he said.

Chief Secretary to the Treasury Laura Trott told the Sunday Times: “There will be bumps in the road and on Wednesday we can expect inflation to slightly increase when data for January is published.”

Mr Sunak is also bracing himself for a double by-election challenge in Wellingborough and Kingswood on Thursday.

His party is thought to be facing an uphill battle in the two formerly safe Tory seats.

They were vacated by disgraced former Tory MP Peter Bone, who an inquiry found broke bullying and sexual misconduct rules, and Chris Skidmore, who quit in protest at the Government’s plans to boost oil and gas production.

Rishi Sunak is under pressure as he has failed to close the opinion poll gap with Labour
Rishi Sunak Rishi Sunak is under pressure as he has failed to close the opinion poll gap with Labour (Hugh Hastings/PA)

Further by-election defeats for Mr Sunak could galvanise Tory plotters who have called for him to move aside or risk disaster for the party at the general election later this year.

The by-elections are taking place while MPs are in recess.

But the House of Lords is sitting, and peers will begin detailed examination of Mr Sunak’s Safety of Rwanda (Asylum and Immigration) Bill on Monday.

The legislation aimed at reviving the stalled deportation policy is expected to face numerous changes in the upper chamber, where some fiercely oppose it, setting up an extended tussle between the Commons and Lords.

Meanwhile, Parliament’s Joint Committee on Human Rights said the law is “fundamentally incompatible” with the UK’s human rights obligations and “risks untold damage” to the country’s international reputation.

In a report on Monday, MPs and peers on the panel said “hostility to human rights is at its heart and no amendments can salvage it”.

It follows a difficult week for Mr Sunak in which he faced a backlash after making a transgender joke in the Commons while the mother of murdered transgender teenager Brianna Ghey was visiting Parliament.

He was also criticised for accepting a £1,000 bet with broadcaster Piers Morgan on the success of his flagship Rwanda scheme before the election.

Accusations the Tory leader is out of touch resurfaced when the publication of his tax summary highlighted his vast wealth.

It showed he paid an effective tax rate of 23%, the same as a teacher, on his earnings of £2.2 million, because most of it was in the form of capital gains, which is taxed at a lower rate than income.

The Prime Minister will be questioned by GB News viewers live on the channel on Monday.

Security minister Tom Tugendhat appeared to confirm he has not been out campaigning in Kingswood in the run-up to the by-election.

Asked whether he had visited the South Gloucestershire constituency, he told ITV’s Good Morning Britain: “Kingswood is a long way away.”

It was put to him that this may “tell us something”, to which he replied: “It tells you that I’ve been speaking at different events across the country. I’ve been supporting people in different areas.”

Mr Tugendhat said it is “no great secret” that the Government is going through a “really challenging time”.

But he added: “The whole point about Government is to take difficult decisions and to make sure we’re delivering, and that’s why the priorities the Prime Minister set out, including bringing down inflation and supporting growth, are so important.”