London Daily

Focus on the big picture.
Friday, Oct 02, 2026

Tory MPs to grill Bank of England governor over high inflation

Tory MPs to grill Bank of England governor over high inflation

Andrew Bailey’s appearance at select committee will come amid work from chancellor to find new ways to ease cost of living
The Bank of England governor, Andrew Bailey, will face a grilling from angry Conservative MPs over inflation on Monday, as cabinet sources moved to quell the incendiary remarks about the Bank’s independence.

The governor’s appearance before MPs – which has been likened to the showdowns with former Bank boss Lord Mervyn King during the 2008 crash – will come amid intense work from the chancellor, Rishi Sunak, to find new measures to ease the cost of living before the summer recess.

Labour will challenge Conservative MPs to vote for a windfall tax on oil and gas companies in an amendment to the Queen’s speech – a move Sunak has failed to rule out but which is intensely opposed by the business secretary, Kwasi Kwarteng.

Bailey’s appearance at the Treasury select committee will come in the aftermath of growing criticism of the Bank’s performance, including from some cabinet ministers, one of whom told the Telegraph they were now “questioning its independence”.

Cabinet sources moved to quell speculation, with one dismissing the prospect as “not even up for discussion”. Another cabinet minister called independence “sacrosanct” and said the Bank’s situation was not unique: “All central banks are grappling inflation.” A Downing Street source said that Boris Johnson was not entertaining the prospect.

Harriett Baldwin, one of the Tory MPs on the committee, said there were serious questions for the Bank to answer on inflation. “I have been flagging up for a long time now the risk of them misjudging things and putting in too much monetary stimulus into the economy for too long,” she said.

“When things started to open up again, they didn’t really take their foot off the pedal very quickly. There are things that have been unforeseen like the war in Ukraine, but there are things that were foreseen that the fiscal and monetary stimulus was there for too long and too protracted once things started to recover.”

Kwarteng said on Sunday that it was concerning that inflation was running higher than the Bank’s target. “It is a matter of fact that when the Bank of England became independent in 1997, they had an inflation target of 2%. Inflation is running into almost double digits now. That is an issue, clearly,” he told Sky News’ Sophy Ridge on Sunday programme.

“We have had the Covid pandemic, we have had a huge spike in economic activity after the lockdown restrictions were eased, and then, of course, you have got this war in Europe for the first time in 70 years.

“All of these things mean that it is a very difficult time and I think [Bailey] is doing a reasonable job. But it is true to say that 2% is part of their mandate and they have to keep it to 2%.”

Labour said the attacks on the bank’s independence were a distraction. Rachel Reeves, Labour’s shadow chancellor, said: “Instead of trying to blame the Bank of England for the government’s mistakes, the chancellor should call an emergency budget, scrap the hike in national insurance and back Labour’s costed plan for a windfall tax to help keep people’s energy bills down.”

The Treasury has denied plans for an emergency budget but is expected to announce some new limited measures to ease the cost of living once data on fuel prices appears within the next fortnight, which will inform the autumn price cap rise.

Tax changes will be impossible before the autumn budget, though Johnson has repeatedly insisted to MPs that he is looking for ways to cut taxes.

The shadow climate change secretary, Ed Miliband, said it was “frankly obscene that the government is refusing” a windfall tax on oil and gas companies and predicted it was inevitable, calling it an “unanswerable case”.
Newsletter

Related Articles

0:00
0:00
Close
Scottish Court to Rule on Bid to Force No-Confidence Vote Against Aberdeen Council Co-Leader
UK Bans Extra Charges for Seating Children Under 12 Beside Accompanying Adults
UK Introduces Vaping Duty and New Licensing Requirements
Greggs to Close Four UK Factories and Cut 740 Jobs
Hundreds of Prisoners Released Early as England and Wales Prisons Reach 98% Capacity
UK Unveils New Russia Sanctions Targeting War Funding and Shadow Fleet
Burnham Says There Are Strong Indications of Iranian Involvement in RAF Fairford Security Breach
Prime Minister Andy Burnham Raises Prospect of Reviewing Britain's Post-Brexit EU Relationship
Markets Price in Bank of England Rate Increases as Inflation Rises to 3.1%
UK Borrowing Costs Climb Toward 5.5% as Global Bond Sell-Off Intensifies
UK-France One-In-One-Out Migration Agreement Expires as London Seeks Alternative Measures
Southwest England Faces Flood Alerts After Heavy Autumn Storms
UK Expands Funding for Rapid Electric Vehicle Charging Infrastructure
Welsh Government Approves Funding to Upgrade South Wales Transport
Northern Ireland Tensions Rise as Orange Order Rejects Drumcree Compromise
NHS Leaders Back Early Design of Proposed National Care Service
More Than One-Third of Regional UK Universities Face Financial Deficits
UK Current Account Deficit Narrows as Cross-Border Financial Flows Remain Strong
Bank of England and FCA Issue New Rules for Stablecoins and Digital Assets
MI5 Warns UK Universities Over Research Links With Chinese Institutions
UK Energy Price Cap Rises 4% as Electricity VAT Is Temporarily Suspended
Equity Calls for UK Personality Rights to Protect Performers From AI Replication
OpenAI Pauses Advanced Model Training Following Safety Concerns
Scottish Government Proposes Replacing 32 Councils With Larger Regional Authorities
Ofgem Raises UK Household Energy Price Cap by 4% From October
UK Counter-Terrorism Police Continue Investigation After Five Arrests Near RAF Fairford
OECD Cuts UK 2027 Growth Forecast to 1%
Labour Says State Pension Triple Lock Remains Protected Through Current Parliament
Andy Burnham Pledges National Care Service With Free Social Care in England
Six Flags Permanently Shuts Landmark X2 Roller Coaster Following Safety Scandals
Metropolitan Police Rule Out Terrorism in Golders Green Stabbing Investigation
Lithium-Ion Battery Identified as Cause of Fatal Merseyside House Fire
UK Department Rejects New Sea Use Framework Due to Stakeholder Fatigue
Major Thames Water Pipe Burst Causes School Closures in London
Aldi Commits £900 Million to Expand UK Supermarket Network
Scottish Affairs Committee Warns Skills Shortages Threaten Defence Sector Expansion
Parliamentary Committee Warns Northern Ireland Budget Deadlock is Stalling Economic Growth
NHS Hospitals in England Face Severe Shortages of Essential Medications
Home Secretary Signals Major Overhaul of UK Immigration and Leave to Remain Policies
Chancellor Promises New Job Schemes Alongside Strict Fiscal Discipline
Energy Secretary Proposes Taxpayer-Funded Green Transition and National Electricity Grid
UK Government to Renationalise Avanti West Coast Railway Franchise in March
Prime Minister Andy Burnham Pledges Major Social Care and Infrastructure Reforms
Five Suspects Released on Bail Following Alleged Bomb Plot Near RAF Fairford
UK Diesel Prices Hit Record High of 199p Per Litre
Transport for Wales and Network Rail Complete Electrification of South Wales Metro
Defra Expands Incentives for Sustainable Farming and Biodiversity in England
Northern Ireland Executive Approves Funding Package to Resolve Public Sector Pay Disputes
Universities UK Warns of Financial Insolvency Risks for Higher Education Institutions
UK Prisons Activate Emergency Protocols to Manage Capacity Pressures
×