Jeremy Hunt has warned interest rates must be cut because of the financial “pain” families are going through.
The Chancellor said that rates should be slashed from their current 5.25 percent because inflation has started to plunge.
Mr Hunt’s remarks came during an interview on ITV’s The Martin Lewis Money Show.
Asked about NatWest chair Sir Howard Davies’ comments that it isn’t that difficult a time to buy a home, the Chancellor said: “I just don’t really understand how he could have said that.
“When I’m looking at the pain that families are going through because they’re seeing interest rates go up to 5.25 percent, mortgage rates go up by considerably more than that if they have to change it.
“So, I think people are finding it very difficult. I think we’re seeing that in the volume of house transactions that are happening.
“And as a Conservative, I believe that getting your foot on the housing ladder is a very important stage in your life, and we want to do everything we can to help that.”
Interest rates, the rate of price rises, have tumbled from more than 10 percent to 3.9 percent in the past year.
Economists expect inflation to tumble further throughout the spring, heaping more pressure on the Bank of England to cut interest rates sooner than they had planned.
Mr Hunt added: “The biggest thing I can do is to support the Bank of England as they bring down inflation, because that means interest rates will come down. And that means that in the end, mortgages will get cheaper. There are lots of other things, but that’s the thing I’m most focused on at the moment.”
Separately, Mr Hunt has hinted that more tax cuts could be on the way in the spring, saying lower-taxed economies were more “dynamic”.
Speaking to The Rest Is Money podcast, hosted by Robert Peston and Steph McGovern, the Chancellor said: “If you look over the last decade… the advanced economies that have grown the fastest have been the ones with lower taxes, not higher taxes.
“In that period when I wasn’t making a profit, the taxes that bothered me the most were the taxes you have to pay even before you’ve made a penny of profit.
“So for example, business rates, employers’ National Insurance contributions, these are really expensive taxes that you have to pay right up front. So if you can bring those taxes down, you reduce the number of businesses that go bust, you make it easier for businesses to get off the ground.”
He added: “As a Conservative I really do believe that lower taxed economies are more dynamic, more entrepreneurial, more energetic. And that’s how we get competitive.”
