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Mark Carney accuses Truss government of
undermining Bank of England
Former governor’s comments come after central bank
forced into £65bn intervention to avert financial crisis
Kalyeena
Makortoff Banking correspondent
@kalyeena
Thu 29 Sep
2022 08.08 BST
The former
governor of the Bank of England Mark Carney has accused Liz Truss’ government
of “undercutting” the country’s economic institutions and working at “cross
purposes” with Threadneedle Street.
Carney’s
comments come after the Bank was forced to step in with a £65bn emergency
bond-buying programme on Wednesday as part of efforts to quell a market
meltdown, which risked draining pension funds of cash and leaving them at risk
of insolvency.
Sweeping
tax cuts announced by the chancellor, Kwasi Kwarteng, last week have triggered
investor panic over the future health of the UK economy, prompting a sharp fall
in the value of the pound and driving government borrowing costs higher.
Carney
said: “Unfortunately having a partial budget, in these circumstances – tough
global economy, tough financial market position, working at cross-purposes with
the Bank – has led to quite dramatic moves in financial markets.”
The Bank’s
massive intervention on Wednesday prompted comparisons to 1992’s Black
Wednesday, when the UK was ejected from the European exchange rate mechanism
for failing to keep its exchange rate above its lower limits.
However,
the intervention appeared to have made some impact in calming the market
turmoil, though the pound was still down around 1.1% against the dollar at
$1.07 on Thursday morning.
Carney, who
made the comments in an interview with BBC Radio 4’s Today programme, led the
Bank of England for seven years until March 2020.
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