London Daily

Focus on the big picture.
Thursday, Jul 16, 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
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
Spain and UK Dismantle Gibraltar Border Following Landmark Schengen Integration Treaty
Church of England Rejects Plan to Rewild Thirty Percent of Land by 2030
UK Parliament Examines Future of Gaelic Broadcasting in Scotland
Thames Water Faces Criticism Over Four Million Pounds in Bonus Payments
South East Water Crisis Puts UK Water Regulation Under Renewed Scrutiny
UK Report Highlights Racial Inequality in Homelessness Support Services
UK Government Defends Proposed Social Media Curfew for Teenagers Despite Criticism
Reform UK Gains Recognition as Major Political Party in New Polling
Labour Party Faces Internal Divisions Over Gaza Policy and Asylum Reform
Experts Warn UK Housing and Transport Infrastructure Is Unprepared for Rising Extreme Heat
UK Human Rights Committee Begins Review of Immigration and Asylum Bill
UK Parliament Launches Inquiry Into Declining High Streets Across England
Bank of England Governor Warns of Growing AI Risks to Global Financial Security
UK Public Finance Institutions Mobilize Fifty Billion Pounds to Support Growth and Jobs
UK Parliament Opens Inquiry Into Long-Term Strategy Toward Russia
UK-India Trade Agreement Takes Effect With Zero-Duty Access for Nearly All Indian Exports
Forget Tinder: The Surprising Platform Where People Find Love
UK Government Faces Growing Debate Over Local Control of Immigration Enforcement
UK Biodiversity Forum Highlights Business Need to Protect Natural Environment
UK Parliament to Consider Workplace Temperature Limits Amid Climate Concerns
UK Parliament Considers Independent Immigration Appeals Authority Proposal
BBC Charter Renewal Scrutiny Intensifies as Parliament Reviews Broadcaster’s Future
Parliament Reviews Future of UK Maternity and Neonatal Care Services
UK-India Trade Accelerator Launched to Help Smaller Firms Expand Into Indian Market
UK Business Leaders Meet in Edinburgh to Address Economic Risks From Biodiversity Loss
UK Parliament Prepares for Sir Keir Starmer’s Final Prime Minister’s Questions Before Leadership Transition
Green Party-Led Lewisham Council Moves Against Cooperation With Home Office Immigration Raids
UK Government Faces Parliamentary Pressure Over Capita Contracts in Shared Services Programme
UK Economy Expected to See Modest Growth as OECD Highlights Fiscal and Global Risks
Public Accounts Committee Warns UK Government’s Four Point Three Billion Pound Shared Services Plan Risks Failure
EU and UK Sign Agreement Removing Gibraltar Border Controls After Years of Post-Brexit Uncertainty
OECD Warns UK Must Maintain Fiscal Discipline as Andy Burnham Prepares to Become Prime Minister
UK-India Free Trade Agreement Enters Into Force as Businesses Seek New Growth Opportunities
Harvard Astrophysicist to Lead U.S. Scientific Advisory on Unidentified Aerial Phenomena
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
Emergency Sirens Activated Across Bahrain as Interior Ministry Issues Shelter Directives
Key Trends to Watch
United Nations Expert Calls for Full Implementation of Supreme Court Ruling on Legal Definition of Sex
Industry Coalition Urges Labour Lawmakers to Back Continued North Sea Oil and Gas Production
Parliamentary Committee Calls for Tougher Restrictions on Unhealthy Food Advertising
Government Expands Awaab's Law to Cover Heat and Additional Housing Hazards
Energy Regulator Opens Independent Investigation Into National Grid Operator
United Kingdom and European Union Sign Landmark Gibraltar Border Agreement
Chancellor Unveils Financial Services Reform and Artificial Intelligence Strategy at Mansion House
Counterterrorism Police Take Over Investigation Into Killing of Former Minister Ann Widdecombe
Beer Industry Warns UK Rules Could Limit Growth of Alcohol-Free Market
Home Office Faces Legal Challenges Over Asylum Seeker Accommodation Closures
UK Heatwaves Linked to More Than Two Thousand Seven Hundred Deaths as Climate Debate Intensifies
Home Secretary Faces Pressure Over Political Security After Ann Widdecombe Murder Investigation
×