Bank governor wades into row over Reeves’ focus on fiscal rule forecasts | Bank of England
Andrew Bailey, the Governor of the Bank of England, entered into discussions on Rachel Reeves’ financial rules with a warning against the “overpayment of the Budget Responsibility Estimations Office.
Chancellor announced expenditure cuts in the spring statement in March to rebuild a 9.9 billion pound ceiling gap against financial rules based on projections from OBR.
These include welfare cuts that lead to a major Backbench rebellion in front of a House of Commons next week.
Bailey said that rather than looking at the wider problems about the sustainability of public finances, there are risks that “constantly focusing on a number of 9 billion pounds”.
“I think it is important to emphasize that the figure of 9 billion pounds is a five -year estimate,” he said to the members of the Lords Assembly on Tuesday. “If we know something about estimates – it won’t be £ 9 billion.”
“There is a danger of excessive interpretation of a five -year estimate.”
Bailey said that the Bank did not make suggestions on how to change the financial framework, but that investors expressed concerns about the current situation on which Reeves constantly evaluated its next movement on the basis of small changes in economic appearance.
“I’m just warning because it is not a good situation to have financial markets to launch financial policies on a daily basis,” he said. “I probably don’t think I contradict anyone around the government when I say this.”
Bailey, the aging population, the end of the aftermath of peace after the Second World War and the need to adapt to climate emergency, including the need to spend more spending on long -term difficulties, including the need to discuss the public.
Bailey’s warning reiterated concerns expressed by the International Monetary Fund in his annual report on the British economy last month.
In a positive assessment of the UK in general, the IMF thinks that “small revisions in economic appearance can erode the ceiling gap in the rules subject to intense market and media examination”. He made a series of suggestions that required only one obbilic estimation instead of both.
Speculation is known to have visited OBR re -visiting productivity forecasts in front of the autumn budget in front of the autumn budget where Reeves may be forced to announce fresh tax increases.
Asking questions about the appearance of interest rates, Bailey said that he expects his peers to continue to fall after four interruptions since last summer – but emphasized the increasing unpredictability of the global ground. “In my opinion, I think it’s down and I will continue to be like this.”
The Minister emphasized his concerns about the quality of data spreading from the office for national statistics, including accepting that the bank exaggerated consumer price inflation in April.
Bailey said, “For us, it is very important to address these issues,” Bailey said. He discussed the inflation disruption and added: ından As far as I understand, it was to do it with an electronic table that was number one for the number of vehicles at a certain fuel task level compared to others. ”
