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Jeremy Hunt has finally admitted that there were flaws in the Bank of England’s economic forecasting after it failed to get a grip on runaway inflation.
After months of refusing to comment on the Bank’s mistakes in the face of criticism from economists and Tory MPs, the Chancellor said on Monday that its modelling needed to improve.
Asked whether the Bank had “got it right” on Monday, Mr Hunt told MPs: “The Bank of England governor himself has been very open about the fact that their inflation forecasting has not been accurate.
“And they are conducting an independent review, to see how they can do it better. So, you know, it’s clear that there have been some issues with the way that process has worked.
“What I would say about the point raised is simply that I think, in my dealings with the Bank of England, I have never once had any reason to question their resolve to hit the target. But we need to make sure the forecasting is better.”
Mr Hunt also warned that it was taking “too long” for banks to pass on higher interest rates to savers, particularly in easy access accounts.
He said that he had raised the problem “in no uncertain terms” at his meeting with bank chiefs last week and added: “I’m working on a solution because I think it is an issue that needs resolving.”
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