Bank of England should keep to inflation target, says Kwarteng

The Business Secretary said the Bank’s governor is doing a ‘reasonable job’ amid reported Cabinet unhappiness at its performance.
The Bank of England has a target of 2% for inflation (Yui Mok/PA)
PA Wire
Gavin Cordon15 May 2022

Business Secretary Kwasi Kwarteng has said it is clearly “an issue” that the Bank of England is failing to meet its inflation target.

With the Government coming under intense pressure over the cost-of-living crisis, The Sunday Telegraph reported some Cabinet ministers were unhappy with the Bank’s performance and questioning its independence.

According to the Bank’s most recent forecast, inflation is set to rise above 10% against a target set by the Government of 2%.

During a round of broadcast interviews, Mr Kwarteng said he believed the Governor, Andrew Bailey, was doing a “reasonable job” in difficult circumstances, but the 2% target was part of the Bank’s mandate “and they have to keep it to 2%”.

Business Secretary Kwasi Kwarteng said the failure to meet the target is clearly ‘an issue’ (Dominic Bailey/PA)
PA Wire

Inflation is running into almost double digits now. That is an issue, clearly,” he told Sky News’s Sophy Ridge on Sunday programme.

“I think Andrew Bailey is doing a good job in difficult times. These are completely unprecedented times.

“We have had the Covid pandemic, we have had a huge spike in economic activity after the lockdown restrictions were eased, and then, of course, you have got this war in Europe for the first time in 70 years.

“All of these things mean that it is a very difficult time and I think he is doing a reasonable job. But it is true to say that that 2% is part of their mandate and they have to keep it to 2%.”

Speaking later on the BBC’s Sunday Morning programme, Mr Kwarteng said it would be “very difficult” to get inflation back down to 2%, although he acknowledged other countries were experiencing similar pressures.

“Most countries in the world are running high single digit, some even double digit, inflation, but they (the Bank) have done a very good job,” he said.

“It’s very easy with hindsight to say that they could have done this or they could have done that. All I know is that Andrew Bailey is a very respected, very capable, central bank governor and he’s doing all he can to deal with this issue.”

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in