Clarke accused over Bank talks

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Indy Politics
The Government's decision on interest rates, expected by the City to be a half-point rise, was put off until after tomorrow's local elections in order to minimise the political damage, Gordon Brown, the shadow Chancellor, alleged yesterday.

He accused Kenneth Clarke, the Chancellor, of postponing his monthly meeting with Eddie George, Governor of the Bank of England, until Friday. The meeting would normally have been expected today, the first Wednesday of the month. A Treasury spokesman said the meeting had been postponed for "diary reasons", but refused to deny that the timing of the local elections was a factor. A spokesman for the Bank of England said there was "no peculiar reason" for choosing Friday, "it was just the best day".

Mr Brown said the postponement would "undermine confidence in British economic policy making", and drew attention to Mr Clarke's statement last year that monetary decisions should be made on "the economic priorities of the moment, not give way to short-term political pressures".

The Governor also said last September that the new system of publishing the minutes of his meetings with the Chancellor ensured that "monetary policy decisions are essentially technical economic decisions and not dominated by short-term political considerations". The Bank is likely to be concerned that the appearance of political pressure on the timing of interest rate decisions will weaken its anti-inflationary credibility.

Since the new system was brought in a year ago, the minutes of 16 meetings have been published. Thirteen of those meetings have been on Wednesdays; on two of the other occasions Mr Clarke was abroad on the Wednesday, and on the third Mr George was abroad. Both are in the country today.

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