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Jacob Rees-Mogg launches attack on Bank of England - 'let the country down'

Jacob Rees-Mogg criticised the Bank of England more openly this week. (PA)
Jacob Rees-Mogg criticised the Bank of England more openly this week. (PA)

Jacob Rees-Mogg has criticised the Bank of England for the way it handled the early stages of the inflation crisis.

In an interview with GB News the former business minister was discussing Liz Truss's disastrous mini-budget which ultimately led to her downfall just weeks into her premiership.

He said mistakes "are always made" but "there was a concatenation of circumstances that meant that the financial statement in late September 2022 had consequences that led to the end of that government pretty quickly."

He said this happened around the same time with the Bank of England (BoE) was "failing to raise interest rates enough and being slow in dealing with the inflationary problem."

Rees-Mogg said: "The independent Bank of England has one task, to keep inflation at 2%. It has manifestly failed at that task. That is not the government, that is the independent Bank of England.

The Bank of England is in charge of keeping inflation at 2%, it is currently over 10%. (PA)
The Bank of England is in charge of keeping inflation at 2%, it is currently over 10%. (PA)

"As a Minister, we all had to pretend the Bank of England was doing marvellously well. It wasn't it. It's an institution that has let the country down.

But because the government was covering up for the Bank of England, it took all the blame for difficulties in the financial markets, which was partly the government's fault, but not entirely."

Later in the interview when asked about how rising mortgage rates are the new political issue Rees-Mogg said they were a problem but inflation had to be tackled.

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Liz Truss's mini-budget was largely blamed for creating a meltdown in the markets. (PA)
Liz Truss's mini-budget was largely blamed for creating a meltdown in the markets. (PA)

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He said: "What the Bank of England shouldn't have done was the final stage of quantitative easing during the pandemic which added fuel to the fire and added a certain amount to the inflation rate and going back further it should have been normalising interest rates in the 20 teens."

The BoE's independence has been a cornerstone of British monetary policy for decades and Truss's government broke with tradition when some of her ministers criticised the Bank's decisions.

Rees-Mogg was one of the ministers who criticised the Bank at the time, and he faced harsh criticism from economists for it.

Jacob Rees-Mogg ,(Secretary of State for Business, Energy and Industrial Strategy), addressing conference on day 2 photographed during the Conservative Party Autumn Conference held at The International Convention Centre , Birmingham on Monday 3 October 2022 . Picture by Julie Edwards.
Jacob Rees-Mogg criticised the Bank when he was a minister. (PA)

At the time he said the turmoil in the UK's markets was not entirely down to the mini-budget and said the Bank should bear some of the blame.

Deutsche Bank’s chief UK economist Sanjay Raja told the Commons Treasury Committee in October the mini-budget was the “straw that broke the camel’s back”.

Raja said there was “absolutely a global component” to the subsequent chaos but argued “idiosyncratic UK-specific component” as well.