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Truss: Bank of England governor should resign over mini budget response

Truss: Bank of England governor should resign over mini budget response

The governor of the Bank of England should resign over his response to the 2022 mini budget, Liz Truss has suggested.

The former prime minister said she thought elected ministers should have more control over the policies set by the central bank and its chief, Andrew Bailey.

Ms Truss’s tenure in Downing Street lasted just 49 days after her mini-budget triggered mass market turmoil.

In an interview with LBC due to be broadcast on Monday night, she also claimed her political opponents had attempted to “smear” her by blaming the fiscal event for the UK’s subsequent economic woes.

The former prime minister is touring the media ahead of the publication of her book, Ten Years To Save The West.

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Asked by LBC if she thought Mr Bailey should still be governor of the Bank of England, the former prime minister said: “No, I don’t. I certainly think there should be a proper investigation into what happened in September 2022, and the actions the Bank of England took.

“The difficulty is the way that (former Labour prime minister) Gordon Brown set up the independence of the Bank of England in the statute books means it’s very hard to move a governor of the Bank of England on, but I think big mistakes have been made with monetary policy.”

Among her criticisms, she pointed to interest rates being “too low for too long”, and said steps to pump money into the economy following the 2008 financial crash and the Covid pandemic – known as quantitative easing – had “done a lot of damage”.

Ms Truss said she was not advocating for the Chancellor of the Exchequer to be given full control over interest rates.

But she added: “What’s now happening is the Bank of England is managing monetary policy and fiscal policy is having to follow. Fiscal policy has (been) straitjacketed because it’s the Office of Budget Responsibility (OBR), yet another independent body that set the parameters. And I think you’ve got to ask, is that really democratic?”

The Tory MP for South West Norfolk said she wanted to “see the back” of the OBR, the watchdog which forecasts the results of Government tax and spend decisions, and criticised other public bodies including the Environment Agency and Natural England.

Bank of England Monetary Policy Report
Andrew Bailey, governor of the Bank of England (Justin Tallis/PA)

She also told the Sun newspaper’s Never Mind The Ballots the UK must leave institutions which have been thwarting the Government’s Rwanda plan, aimed at deterring unauthorised migration.

“We’ve got to leave the ECHR, abolish the Supreme Court and abolish the Human Rights Act,” Ms Truss said.

Calling for a British “Bill of Rights”, she added: “The idea that human rights were only invented in 1997 is a Blair fiction.”

Ms Truss also sought to defend her record as premier against critics who have blamed the mini budget for the UK’s ensuing economic troubles.

“What they’re saying is not borne out by the facts. It’s a smear, it’s a smear,” she told LBC.

The former PM said she was working to counter these claims, adding: “When I meet people quite often out canvassing or out on the street, people will say you did the right thing.”

The Liberal Democrats have suggested Prime Minister Rishi Sunak should withdraw the Conservative whip from Ms Truss because of her comments.

Lib Dem deputy leader Daisy Cooper said: “Sunak cannot have a Conservative MP on his backbenches who peddles conspiracy theories and is, frankly, becoming a national embarrassment on the global stage.

“By allowing Liz Truss to remain a Conservative MP, Rishi Sunak is yet again proving himself too weak to govern.

“The Conservative party has now reached a new low, where conspiracy theories are allowed to fester in their parliamentary party.”

The Prime Minister’s official spokesman said: “The PM is fully supportive of the work the independent Bank of England has done to help bring down inflation.

“The Government continues to ensure that fiscal and monetary policy are working together to bring inflation down.”

The Bank of England was approached for comment.