Kwasi Kwarteng’s mini-Budget was botched and the government has lost control of public spending. But this morning Jacob Rees-Mogg was not wrong to deflect at least some of the blame for current market turmoil on the Bank of England. The bank has been hopelessly behind the curve on inflation – in May last year it was still confidently predicting that the Consumer Prices Index would rise no higher than 2 per cent this year. Shortly before Kwarteng’s budget it showed that it was still lagging behind by raising interest rates by 0.5 per cent rather than the 0.75 per cent which markets had been expecting.
If ever there was a public official who deserved to be relieved of his responsibilities it is surely Andrew Bailey
But it is the bank’s latest fiasco that has really unsettled markets. Speaking in Washington on Tuesday, the bank’s governor, Andrew Bailey, ruled out extending beyond Friday the emergency gilt purchases which the bank has been undertaking to shore up the pensions industry.
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