LONDON (Reuters) – Bank of England policymaker Jonathan Haskell says the Bank of England is in trouble as the government’s expansionary fiscal policy appears with the Bank of England’s efforts to reduce inflation.
“Frankly, we are in a difficult, uncomfortable position because I don’t like a situation where there is only one institution — the independent central bank. At least being portrayed against the other institutions, elected governments,” he said on Thursday.
“Financial expansion with tight supplies, I’m afraid, will be very difficult,” he added during a panel discussion hosted by the Reform Synagogue in North West London.
Haskell, an outside member of the Bank of England’s Monetary Policy Committee and one of three policymakers who voted to triple interest rates, rose 2.5 percentage points this week to 2.5%, instead of A half-percentage-point hike favored by most.
UK inflation hits 10 year high in July 10.1% , the Bank of England has raised interest rates by half a percentage point in two consecutive interest rate meetings, which is the largest rate hike since 1995.
Finance Minister Kwasi Kwarteng will provide more details of the government’s economic policies planned in Friday’s financial statement. He is expected to confirm permanent tax cuts of around 30 billion pounds ($34 billion dollars), detailing the Households and
Earlier Thursday, Bank of England Governor Andrew Bailey wrote in a letter to Kwarteng that a household energy cap would reduce inflation
The Bank of England said it would take the new government’s policies more fully into its November economic forecast.
“Take the government’s word for it, what they’re hoping for is that the fiscal expansion will boost modest growth rates and…if we expand the supply side of the economy, then let’s … get rid of the push-pull situation,” Haskell said.