A Cabinet minister denied that Britain had a “zombie Government” as the cost-of-living crisis worsens.

Education Secretary James Cleverly insisted that “Government does continue” despite the focus on the Tory leadership election.

He highlighted his response to A-levels , Transport Secretary Grant Shapps speaking out against the RMT rail strikes and Chancellor Nadhim Zahawi responding to a string of grim economic figures.

Mr Cleverly told LBC Radio on Thursday: “Government does continue, ministers are still working.”

However, opposition parties have accused the Government of being in a “zombie” state, with Boris Johnson having jetted off on holiday to Greece and many key decisions being left to his sucessor as Prime Minister.

Asda chairman Lord Rose, a Conservative peer, criticised the Government yesterday for a “horrifying” lack of action over the inflation crisis.

The new PM is due to be announced on September 5.

Pressed by LBC presenter Nick Ferrari over whether the leadership contest through the summer was a “bad look”, Mr Cleverly admitted that he would have been “very happy if this whole process was over more quickly”.

“But, as I say, one of the people contending for this is a backbencher (ex-Chancellor Rishi Sunak) not involved in government at all anymore,” he said. “Liz is the Foreign Secretary and I know that she’s still active on the foreign affairs side of things as well. But yes, of course we’d like to see this wrapped up quicker.”

Minister forced to deny opposition claims of a ‘zombie Government’

Chancellor Nadhim Zahawi faces a string of grim economic figures (AFP via Getty Images)

Financial experts, meanwhile, have warned today how some smaller businesses were saying they faced difficulties finding sufficient working capital if inflation jumps to 11 per cent.

It rose to 10.1 per cent in July, according to official figures yesterday, and is forecast by the Bank of England to reach more than 13 per cent in the autumn.

“The pace of change in costs has been extraordinary,” said Chris Petts, the restructuring partner at professional services firm Grant Thornton UK.

Both the Tory leadership candidates were forced today to confront a stark report from economists warning of the danger tax cuts could pose to the public purse.

Ms Truss and Mr Sunak, who have repeatedly clashed over the timing and type of tax cuts, were faced with a sobering analysis by the respected Institute for Fiscal Studies, which warned that “permanent tax cuts” could exacerbate pressures on public spending.

Mr Cleverly defended Ms Truss’s plans for swiftly cutting tax, which includes reversing the National Insurance contributions hike brought in to plough billions into the NHS and social care.

He emphasised that she was “pursuing a growth strategy”.

Former Chief Whip Mark Harper, who is backing Mr Sunak, stressed that he was prioritising tackling inflation before he would slash 4p off Income Tax over the next Parliament.

Despite several polls suggesting Ms Truss will win, Mr Harper insisted that it was still “anyone’s race”.

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