Bank of England boss Mark Carney slams Theresa May for deflecting blame onto central bank over rising inequality
In her conference speech in October she appeared to blame the bank for wealth imbalances
BANK of England boss Mark Carney yesterday accused Theresa May of “blame deflection” for attacking his policies.
Mark Carney insisted the central bank was not the cause of rising inequality in the UK.
It was a thinly-veiled dig at the Prime Minister, who in her conference speech in October appeared to blame it for wealth imbalances. Her criticism was seen as a reason the governor only agreed last month to stay on until 2019 rather than serve a full term to 2021.
He told MPs on the Treasury select committee that inequality and low rates “are caused by more fundamental factors, and an excessive focus on monetary policy in many respects is a massive deflection exercise”.
He also defended use of monetary policy tools such as Quantitative Easing, the pumping of extra cash into the economy, which he said was “a symptom of the situation”.
He added: “The causes are much more fundamental, the solutions are much more fundamental.
“Curing the patient requires the operation and monetary policy is keeping the patient alive.”
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Mr Carney also confirmed to MPs he would be stepping down as governor in June 2019, regardless of when Brexit was triggered.
President-elect Donald Trump has also hit out at central bankers.
Meanwhile, inflation took a surprise fall in October, dropping to 0.9 per cent from one per cent the month before.
Analysts had expected the Consumer Price Index to tick up to 1.1 per cent and start heading towards the Bank’s two per cent target.
But the Office for National Statistics said there was “no clear evidence” the plunging value of the Pound since the Brexit result was bumping up shop prices.
Mr Carney warned people not to be fooled by the dip, saying inflation will go up.