'The governor has one responsilibity which is inflation and he has failed...so he's in the dock'

THE governor of the Bank of England was "in the dock" yesterday after being attacked over his record on inflation.

- Robert Kellaway, Sam Lister

Andrew Bailey came under fire as interest rates rose by 0.5 percentage points to five per cent, with mortgage rates soaring to the highest levels since the 2008 financial crisis.

Inflation remains at 8.7 per cent, despite hopes of a fall.

Former Tory leader Sir Iain Duncan Smith said: "The governor has one responsibility which is inflation and he has failed to get that done so he's in the dock." Politicians and city analysts fear Mr Bailey has no option but to slam on the monetary brakes, saying he was too slow to see inflation coming.

The Bank's aggressive rise in interest rates and its effect on the 2.4 million people with fixed rate mortgage deals coming to an end in 2023 and 2024 raised a storm of fury yesterday.

Critics believe Mr Bailey ignored the threat of inflation for months, in spite of being warned about it by his own chief economist in 2021.

Mark Harper, the Transport Secretary, was openly critical when asked if the Bank had been too slow to see the inflation threat. He said: "Some people make that criticism, yes, and there was a decision to make at the beginning about whether inflation was transitory or not. Rishi Sunak made it clear when he was Chancellor that he saw inflation as a problem and he saw that early on."

John Baron, Tory MP for Basildon and Billericay in Essex, said: "Consumers and households are paying the price for the Bank of England being asleep at the wheel.

"Given their remit of keeping inflation below two per cent, it was woefully behind the curve." He added that the impact of the rise meant there was a "risk of overkill unless they know something we don't".