The Governor of the Bank of England, Andrew Bailey, clashed with members of the Parliamentary Treasury Select Committee when they were critical of the Bank’s actions in tightening monetary policy to drive down inflation.

With headline inflation still well into double figures, some committee members accused Bailey and the MPC of damaging confidence in the Central Bank.

While providing his half-yearly testimony before Parliament, Bailey was asked how he can expect the public to be confident that the right decisions have been made over the past eighteen months given the continued high level of inflation in the economy.

Bailey clashed with committee chairman Harriet Baldwin over the Bank’s delay in raising interest rates until the furlough scheme had come to an end. Inflation has remained above the Bank’s 2% target every month since December 2021.

Bailey countered by commenting that since the scheme was considered vital to drive the economy forward as the country was emerging from the Pandemic and was inflationary by its very nature, inflicting higher interest rates on borrowers would have been counterproductive in the MPC’s opinion.

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