Bank of England's Mark Carney accused of delaying rate hike ahead of general election
Labour MP John Mann claims Mark Carney is attempting to delay interest rate increases until after the election
Monday 18 August 2014
A second MP has attacked Bank of England Governor Mark Carney, claiming the Canadian is "clearly" attempting to delay rate rises until after the next general election.
Treasury Select Committee member John Mann’s intervention comes in the wake of accusations from Conservative MP Mark Field of a “clear bargain” between Carney and Chancellor George Osborne to keep rates low until the country goes to the polls next May.
A dovish inflation report from the Bank last week meanwhile dampened prospects for an interest rate rise this year.
Mann said: “It is abundantly clear that Mark Carney is attempting to delay interest rate increases until after the election when they rise immediately.”
Mann previously clashed in public with Carney in November last year when he accused him of being “in danger of being too close to the Chancellor and acting as a politician rather than a Governor”.
Carney responded that he was “more than mildly offended” by the thrust of Mann’s comments.
The Bank of England — operationally independent since 1997 — and the Treasury deny any kind of backroom deals between Osborne and Carney, following Field’s claims in a report in City AM.
The Bank said there “was no agreement between the Governor and the Chancellor over Bank rate and never has been”.
Video: Mark Carney discusses interest rate rises in June
One insider added: “The idea is absolutely mad. The monetary policy committee guards its independence fiercely.”
The first rate rise since 2007 is currently priced in by financial markets for February next year. Experts also point out that Carney has just one of nine votes on the MPC, in contrast with his previous role at the Bank of Canada, making it difficult for him to deliver on any “pact”.
Minutes of the Bank of England’s latest policy meeting may also show dissent among the committee for the first time in a year with Martin Weale and Ian McCafferty possibly voting for rate rises.
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