The chief economist of the Bank of England criticized the lack of cooperation between the Liz Truss government and the state economic institutions.
Hugh Peel said the country would benefit from increased cooperation between the institutions.
Speaking at the Office for National Statistics (ONS) conference on Understanding cost of living through the statistics, Mr. Peel said: “In my opinion, we could have won in recent weeks if the interaction between the other institutions had gone along this pattern.”
He highly appreciated the cooperation between the official statisticians from the ONS Bank of England.
“This is a model of how macro policymakers in the UK need to respect the institutional framework when they interact with each other,” he said.
The Rafter farm the government announced a mini budget unreasonable tax cuts alongside spending billions of pounds on energy price guarantees without consulting the Office for Budget Responsibility (OBR).
The independent office is consulted before the budget is announced and provides economic forecasts used by bodies including the Bank of England.
The bank confirmed it was not informed of the contents of the mini-budget statement before it was tabled in Parliament on 23 September.
The announcement, coupled with the lack of consultation the OBR has caused financial turmoil.
On the wave of a mini-budget, the pound fell to a record low against the dollar, leading to higher costs for those importing goods.
Mortgage rates a rose due to financial uncertainty and anxiety, the Bank of England will continue to increase interest rates to keep inflation down to its target rate of 2%.
The cost of government borrowing also rose sharply, and the Bank had to start emergency intervention prevent a the collapse of the pension system.
Mr Peel has become an unlikely critic of the government in the weeks since the former chancellor Kwasi Kwartengmini budget announcement.
He disputed the government’s claims that the economic fallout was linked to global factors such as the war in Ukraine, saying there “definitely a UK specific component” to market reaction.
The Bank and the Government were effectively on a collision course as Ms Truss and her Chancellor sought to boost growth with a tax cut plan and the Bank sought to slow growth through higher interest rates.
The vast majority of mini-budget the measures were lifted chancellor Jeremy Hunt after the dismissal of Mr. Quarteng.
https://news.sky.com/story/bank-of-england-chief-economist-criticises-government-interaction-with-other-institutions-12729750
