Liz Truss: It would be wrong of me to countermand the Bank of England’s powers

·1-min read
Liz Truss has previously vowed to re-examine the Bank of England’s mandate (PA) (PA Wire)
Liz Truss has previously vowed to re-examine the Bank of England’s mandate (PA) (PA Wire)

Liz Truss has appeared to row back on some indications she could review the Bank of England’s interest rate-setting powers.

The Foreign Secretary, widely tipped to defeat Rishi Sunak when the Tory leadership winner is announced on Monday, said it would be “completely wrong” for her to say what she wanted interest rates to be.

Ms Truss previously pledged to re-examine the Bank’s mandate to make sure it has a “tight enough focus on the money supply and on inflation”, and one of her allies said she would consider whether the current arrangements are “fit for purpose”.

Liz Truss said she is a ‘great believer’ in the Bank of England’s independence (Jeff Overs/PA) (PA Media)
Liz Truss said she is a ‘great believer’ in the Bank of England’s independence (Jeff Overs/PA) (PA Media)

But on the BBC’s Sunday With Laura Kuenssberg programme, Ms Truss said: “I’m a great believer in the independence of the Bank of England. We need to allow the Bank of England to do that job.

“I think it was about three decades ago we stopped politicians making decisions about interest rates. So, I’m not going to start saying what interest rates the Bank of England should be.”

Pushed again, she said: “I think it would be completely wrong for me as a politician to say what I wanted interest rates to be and to countermand the Bank of England.”

Bank governor Andrew Bailey has hailed its independence from politicians (Yui Mok/PA) (PA Wire)
Bank governor Andrew Bailey has hailed its independence from politicians (Yui Mok/PA) (PA Wire)

Ms Truss has previously insisted she supports the Bank’s independence but will look at other systems around the world when assessing whether it has the correct mandate.

Last month, the Bank’s governor Andrew Bailey said independence over monetary policy is “one of the great virtues of our system”.