Following scathing criticism from Liz Truss, Andrew Bailey, the governor of the Bank of England, said he would be “open to a review” of the institution’s mission to combat inflation.
The Tory front-runner for the leadership has already attacked Mr. Bailey, who has served as the Bank’s governor since 2020, for his tardy action in boosting interest rates to control the inflationary trend.
Now, Mr. Bailey is said to have acknowledged that reviewing the institution’s mandate would be “the correct thing.”
According to a source who spoke with the Telegraph, Mr. Bailey confirmed that the Bank’s mission has not been fully reviewed since it became independent in 1997 during a phone discussion with Chancellor Nadhim Zahawi.
He said that he would be open to a review, saying that independence is crucial but that given we haven’t had one since independence, it is likely the best course of action.
The Bank increased interest rates this month by 0.5% to 1.5%, which is the highest rise in 27 years.
However, others think it ought to have responded more quickly.
One of the most effective ways to limit the rate of price increases is to raise interest rates.
Inflation reached 9.4% in June, and the Bank has already issued a warning that it may surpass 13% this year.
If Ms. Truss is elected prime minister, she plans to reassess the Bank’s mission to “make sure it is severe enough on inflation.”