Rishi Sunak says UK economy has ‘turned the corner’ as he seeks to calm Tory nerves

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Prime Minister Rishi Sunak has insisted Britain’s economy has “really turned the corner” as he tried to calm nerves among Tory MPs and quell talk at Westminster of a threat to his leadership.

Addressing a business audience in Coventry on Monday, he insisted his economic plan was working, with ministers hoping for encouraging data showing falling inflation on Wednesday.

“We really have turned the corner at the start of this year,” Sunak said. “Inflation has been more than halved. Mortgage rates, energy bills falling, wages are rising, consumer confidence, business confidence increasing.”

He added: “After a tough couple of years, we’re now pointing in the right direction and that actually gives me a lot of confidence for the future.”

Rightwing Conservative rebels have been talking up the possibility of Sunak being toppled after the local elections on May 2 if the party does as badly as many Tory MPs fear.

Rebels within the party said they had been speaking to allies of the centrist Penny Mordaunt, leader of the House of Commons, who stood for the party leadership twice in 2022.

But Mordaunt has told colleagues that the speculation has nothing to do with her and that talk of a plot against Sunak is intended to damage both her and the prime minister.

Downing Street insiders said that Sunak’s allies have spoken to Mordaunt and have some sympathy with her. “I suspect it’s not a large group,” said one, referring to talk of a revolt.

“It’s the latest attempt to stir things up. I feel for Penny, it’s not fair. I don’t know how high her ambitions are, but if I were her, I wouldn’t want any of this in the run-up to an election. I would want to wait,” they added.

Kemi Badenoch, business secretary, who is seen as another potential Tory leadership contender, said that talk of a plot was being spread by “one or two” people out of about 350 Tory MPs.

“There will be some people who are unhappy, I’m not going to deny that,” she told radio station LBC. “But we need to move away from the scenario where one or two people can create all the news and 300 others can’t get a word.”

Sunak travelled to Coventry on Monday to speak at the government’s Business Connect conference where he unveiled reforms aimed at boosting apprenticeship numbers and cutting red tape for small businesses.

This included £60mn to pay the full cost of training for anyone up to the age of 21 taken on as an apprentice by a small business and a 50 per cent uplift in financial thresholds to qualify as an SME (small and medium-sized enterprise). 

Iain McIlwee, chief executive of the Finishes and Interiors Sector, a body representing 600 members in the construction sector, said the announcements were “just more sweeties”. McIlwee

“A lot of what we see at the moment is political posturing rather than the government setting out a long-term vision,” he said. 

Joined by Badenoch and education secretary Gillian Keegan, Sunak argued that his cabinet was well equipped to support businesses.

“All of us come from a private sector background and hopefully the fact that we understand business ourselves means we will generate policy that helps businesses,” Sunak said. 

The prime minister added that the government had focused on cutting taxes to support companies, including increasing the VAT threshold to £90,000 and instituting a 75 per cent discount for those operating in the retail, hospitality and leisure sectors. 

Following his speech, Sunak insisted that he remained focused on governing and that the Conservatives were “united” in this ambition. “What matters is the future of our country. And that’s what I am squarely focused on,” he said.