Letter: Backing the Bank

Sir: Your front page story "Rate cut is `too little, too late' " (9 October) repeats the totally false allegation that the Chancellor was involved in a "covert campaign" to "bounce" the Bank of England to cut rates. Nothing could be further from the truth. There are those, including some in the media, who were opposed to the Bank's independence from the outset and want to undermine that independence by whatever means they can. I assume that was also what lay behind your inside commentary. I can't imagine who your reporter spoke to but it certainly was not me as I have never even met him. This fanciful account contains so many inaccuracies that it is not even worth responding to them.

I would just wish to make one point. The idea that I was telling reporters that a rate cut was "in the bag" is totally contradicted by your own front page story last Monday (5 October) which, as it turned out, correctly predicted "Interest rates to fall this week". The source of the story was not "off the record" Treasury briefing, but your own reporter's interpretation of the Governor of the Bank of England's "on the record" remarks at a press conference in Washington.

It was this Chancellor who made the Bank independent and it is this Chancellor who will continue to give the Bank of England his full support whatever difficult decisions it must make.


Chancellor's Press Secretary

HM Treasury

London SW1