Pound fell because Bank of England failed, says Mogg

THE Bank of England was guilty of an ‘institutional failing’ for not raising interest rates quickly enough, Jacob Rees-Mogg claimed yesterday.

Mr Rees-Mogg, who was Liz Truss’s business secretary, hit out at the Bank, which imposed an increase of 0. percentage points in September, for failing to match the US Federal Reserve’s 0.7 rise. He said the ‘significant error’ led to a fall in the pound, adding: ‘The Bank has done a bad job.’

Last week Narayana Kocherlakota, ex-president of the Federal Reserve Bank of Minneapolis, blamed the Bank of England for the market turmoil that led to Miss Truss’s departure, adding: ‘She was thwarted not by markets but by a hole in financial regulation – a hole the Bank of England proved strangely unwilling to plug.’

However, the Bank’s chief economist defended its strategy yesterday, saying its officials were not ‘inflation nutters’.

Huw Pill admitted ‘we are entering a recession’, but talked down the Bank’s role, adding: ‘There is a danger... that we will be blamed. Recession is driven by other forces.’