Were Sunak and Hunt emulating Margaret Thatcher from 1981?

Mararet Thatcher's 1981 budget was infamous.

At the time inflation was 15%, having previously hit 25%. Bank of England interest rates were 12% - and had been ranging between 10% and 17% over the previous five years without making a dent on inflation.

There was only one more thing to try, which was to use fiscal policy to send the economy into a recession. Hence the 1981 budget.

Instead of raising tax thresholds in line with inflation, they were frozen. The 25p tax band was abolished and the new starting rate of tax became 30%.

Duties on petrol, alcohol and cigarettes were raised. VAT went from 8% to 15%. There was a windfall tax on oil companies, which was used to pay down the national debt. There was another windfall tax on banks to stop them lending so much and hence shrink the money supply.

The whole thing was designed to curb consumption and thus force businesses to become more efficient and cut costs, in order to be able to lower prices to tempt consumers.

Several Conservative MPs walked out of the Commons during the budget speech, they hated the tax rises. 364 economists wrote to The Times saying the budget would make things worse.

But the budget worked. Two years later in 1983, inflation was down to 4.59% - a level not seen since the late 1960's. Thatcher got re-elected in the 1983 general election.