The cost of living crisis dominates the British leadership campaign

With double-digit inflation and an economy on the brink of recession, the cost-of-living crisis has dominated the race for Downing Street.

But the two candidates fighting to succeed Boris Johnson as Conservative Party leader and British Prime Minister have different approaches to the issue.

UK inflation is currently at 10.1 per cent – the highest level in 40 years – with forecasts that it could rise to 13 per cent in October.

Analysts at Citibank believe it could even soar to over 18 percent next year due to rising energy costs.

A new energy price cap is set to be announced on Friday as some experts predict certain households could soon be paying a staggering £6,000 ($7,100) a year for gas and electricity.

A University of York study found that more than half of UK households, or 15 million people, will not be able to heat their homes properly by January next year.

Top executive Liz Truss has promised tax cuts and reversed increases in Social Security contributions, which fund public health and social services.

She also proposes cutting taxes on fuels that fund the clean energy transition and rejects “stick-on” solutions to the cost-of-living crisis such as direct state aid.

Supporters of the current foreign secretary say she plans an emergency budget within weeks if she wins the party’s internal vote.

Her opponent, Rishi Sunak, believes tax cuts will have no impact on low-income households as they don’t earn enough to pay for them anyway.

The former finance minister – privately wealthy through his career in business and through marriage – favors direct aid for low-income families who are more affected by price increases.

He has called promises of tax cuts during an economic downturn and skyrocketing inflation a “fairy tale”.

Instead, he has proposed a reduction in sales tax (VAT) on energy bills and a reduction in taxes on commercial real estate (business rates).

Both candidates have officially backed the UK’s ambition to achieve carbon neutrality by 2050.

But Truss, who favors large-scale investments in energy, including the controversial fracking technology where it’s supported by local people, called for a better way to do it without harming people and businesses.

She wants more energy to come from the North Sea and supports the UK Government’s current policy of investing in nuclear power and renewable energy.

Truss supported remaining in the European Union ahead of the 2016 referendum on bloc membership, switching sides after the public voted to leave.

Now unashamedly pro-Brexit, she has spearheaded proposed legislation to overrule parts of the Northern Ireland Protocol the UK has signed with the EU, which governs post-Brexit trade in the province.

She has promised to scrap all EU laws from the UK code to speed up growth.

Like Sunak, she has made no proposals to address Britain’s chronic post-Brexit labor shortages, particularly among seasonal workers.

Sunak has been a passionate Brexiteer for years and has been a key supporter of creating free ports to boost growth.

Truss has called for an overhaul of regulators in the City of London’s financial district if she becomes Prime Minister.

In particular, it wants to merge the Financial Conduct Authority, the Prudential Regulation Authority, which oversees banks and is part of the Bank of England, and the payment systems regulator.

Truss criticized the Bank of England’s response to rising inflation and suggested reviewing the law that gave it operational independence from monetary policy in 1997.

Governor Andrew Bailey replied that the UK’s financial credibility depended on the bank’s independence from government.