Bank chief: I’m open to review of mandate on inflation policy

BANK of England chief Andrew Bailey has said he would be ‘open to a review’ of its mandate to target inflation, following searing criticism from Liz Truss.

The Tory leadership frontrunner has previously lashed out at Mr Bailey, who has been the Bank’s governor since 2020, for his slow response in raising interest rates to rein in spiralling prices.

Now Mr Bailey has reportedly admitted it could be ‘the right thing’ to review the institution’s remit. A source told the Telegraph that in a telephone call with Chancellor Nadhim Zahawi, Mr Bailey acknowledged that the Bank’s mandate has not been formally examined since it became independent in 1997.

‘He said that he would be open to a review, independence is important, but we haven’t had a review since independence and therefore it is probably the right thing,’ according to the source.

This month, the Bank hiked interest rates by 0.5 per cent to 1.75 per cent – the largest increase for 27 years. However, critics believe it should have acted faster.

Raising interest rates is a key way to slow the pace at which prices are rising.

Inflation hit 9.4 per cent in June and the Bank has already warned it could pass 13 per cent this year.

Ms Truss has said she intends to review the Bank’s mandate if she becomes PM to ‘make sure it is tough enough on inflation’.