Cabinet ministers have reportedly criticised the Bank of England over rising inflation and urged Rishi Sunak to do more to hold the institution’s Governor, Andrew Bailey, to account.
Boris Johnson’s party is currently under pressure to to help struggling families as the cost of living crisis worsens and now in an unprecedented move government figures are taking aim at the BoE for failing to keep inflation down.
A senior minister told The Telegraph: “It has one job to do – to keep inflation at around two per cent – and it’s hard to remember the last time it achieved its target.”
Other government insiders are keen for the chancellor to do more to hold Mr Bailey accountable as keeping inflation under control is one of the core functions of the BoE.
Currently inflation sits at 7 per cent, but could reach 10 per cent later this year as the economy heads towards a recession, the Bank of England warned in early March.
The troubling economic outlook, cost of living crisis and sharp increase in inflation, has rankled Tory MPs and caused unexpected criticism of the BoE, which was made independent of government in 1997.
Dr Liam Fox called for the Treasury Committee to launch an “investigation into why the Bank of England so comprehensively under-estimated the inflationary threat”.
On the levelling-up agenda, he added: “Unless we are able to tame inflation, none of our ambitions will be realised.”
Maria Miller, Conservative MP for Basingstoke, said: “I’d suggest the Government needs to heed the words of (Dr Fox) very heavily indeed because he’s right that one of the levers they can pull in their response to the challenges we face is around inflation, and it’s very much in the Government’s gift to be able to make those changes to bring inflation more under control.
“I think, by looking at different countries around Europe and seeing the different levels of inflation, you can see how the fiscal responses that governments have given have driven those changes inherently.
“But the cost-of-living problems that we’re struggling with at the moment need to come first and foremost into the eyes of every minister, regardless of their department.”
In other developments, Mr Sunak has indicated he could be willing to intervene in the cost of living crisis as families wrestle with surging food, energy and gas prices.
He told the Sunday Express: “The global challenges we’re facing are constantly changing, and I’ve always said that I stand ready to take further action as we get more information on pressures we are likely to face later this year.
“Be reassured, I’m alive to the problems people are facing and I’m looking to do everything in my power to help where I can.”
