A former Bank of England rate-setter has openly criticised Andrew Bailey and his team at the Bank of England, saying the institution has “lost control of inflation” The economist is dubbed “Britain’s most prominent rate hawk” ⬇️ jessiehewitson reports
Mr Sentance also responded to a news report about a dinner at Mansion House on Monday night, during which Mr Bailey said his “pre-occupation at the moment is inflation” and highlighted the impact of the pandemic and the war in Ukraine on price rises.
“More excuses from Governor Bailey” he wrote. “The Bank of England can only control inflation if it honestly acknowledges its origins – lax monetary/fiscal policy.” Responding to a tweet about the likelihood of a 0.5 percentage point increase to the base rate next month – a possibility that strengthened, in the view of the markets, after the publication of the pay data – Mr Sentance added: “The cost of earlier inaction and confused messaging from the Bank of England. Governor Bailey has been ineffective and his whole MPC team and support staff are not up to the job.
Mr Sentance, a former director of economics at the Confederation of British Industry, was also critical of Mr Bailey’s predecessor, Mark Carney, arguing he too was too timid and accusing him of groupthink.in 2018, when Mr Carney was still in his role at the Bank. He said he feared the Bank had been too close to the Treasury and “a combination of things have happened… that have weakened the standing and credibility of the Bank.”: “I think the Bank needs to recognise that their job is not to be popular – their job is to keep a lid on inflation. In a sense they’ve spent too much time trying to do [the] generalised right thing and not paying attention to the risks of inflation and that’s come home to roost.
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