How Truss plans to bring the Bank of England to heel

Liz Truss believes the Bank of England has lost control of inflation. If chosen as the country’s next prime minister, she plans to bring it back to heel: ‘I want to change the Bank of England’s mandate to make sure in the future it matches some of the most effective central banks in the world at controlling inflation’, singling out the Bank of Japan as one model to follow.

In the rarified world of monetary policy discussion, this was a bit like chucking a live grenade into a ball pit. Michael Saunders, a member of the Monetary Policy Committee responsible for setting interest rates, noted ‘the foundations of the UK monetary policy framework, I think, are really important and best left untouched’. Adjusted for the sort of language employed by economists, this roughly translates as ‘don’t be so daft’. Governor Andrew Bailey, meanwhile, dropped a barely veiled rebuke with his observation that the independence of the Bank of England is ‘one of the great virtues of our system’.