Mel Stride MP, who chairs the influential House of Commons Treasury Select Committee, spoke passionately in the House of Commons this week about the need for the Bank of England to retain its independence. Having quizzed the Governor of the Bank of England Andrew Bailey on Monday over rising inflation and the cost of living, the MP then defended the Bank in the House of Commons on Tuesday, pointing to the global factors driving up inflation – primarily the Russian invasion of Ukraine – with the Bank having limited levers on which to pull.
His comments follow increased criticism of the Bank in recent weeks, with inflation currently running at around 9% - well above its 2% target. Mr Stride asked Chancellor Rishi Sunak to confirm the Government had “no plans of any kind” to reconsider the Bank’s independence, granted by Gordon Brown in 1997 – a reassurance the Chancellor immediately gave.
Mr Stride said:
“For the past 25 years the Bank of England’s independence has given it credibility and the freedom to look at the long-term without being encumbered by short-term political considerations. I believe some of the criticism levelled against the Bank is unjustified, with much inflationary pressure being caused by global factors out of the Bank’s control. I was pleased the Chancellor was very clear in his response to me in the Commons that it should remain independent from Government.”
