Reports of a split are 'healthy part of analysis'

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The Independent Online
It is no surprise that the Chancellor and Governor of the Bank of England sometimes disagree at their monthly monetary meetings, a Bank of England director said yesterday, writes Diane Coyle.

Referring to recent reports of a split between the two men at their meeting last month, Ian Plenderleith, an executive director of the Bank, said that although these differences of view were written up in ''extreme confrontational terms'' they were a healthy part of the analysis and judgement.

''There is an urge to identify who 'won' and who 'lost' and an intense interest in keeping a sort of scorecard of the effect decisions have, in order to decide, with the benefit of hindsight, who was 'right' and who was 'wrong','' Mr Plenderleith said.

He argued that differences of view should be freely aired and debated. It was thanks to Britain's open monetary arrangements that ''We have successfully surmounted just the kind of inflationary shock that in the past tended to knock us off course,'' Mr Plenderleith said.

In January Mr Clarke announced the second cut in base rates in five weeks. City analysts do not expect him to push his luck by reducing base rates again after tomorrow's meeting.