UK’s Sunak backs Bank of England after inflation criticism

LONDON (Reuters) – British finance minister Rishi Sunak gave the Bank of England and its governor Andrew Bailey – who have been criticised for the recent surge in inflation – his backing on Wednesday, saying they were focused on bringing down price growth.

“It is the Bank of England’s role to control inflation, and they are rightly independent,” Sunak said in a speech to a Confederation of British Industry dinner.

“Over the quarter century since we took monetary policy out of the hands of politicians, inflation has averaged precisely 2% and I know the governor and his team are completely focused on getting inflation back to target.”

Figures published earlier on Wednesday showed Britain’s consumer price inflation hit 9% in April, its highest since 1982, and the BoE has said it is on course to surpass 10% later this year, more than five times the central bank’s target.

A former Conservative defence minister, Liam Fox, last week accused the BoE of failing to spot the inflation surge coming and the Sunday Telegraph newspaper reported that current ministers, whom it did not name, were also critical.

In his speech, Sunak said inflationary pressures were starting to weigh on growth and he reiterated his willingness to help support households facing energy bills that have surged further after Russia’s invasion of Ukraine.

“I have always been clear, we stand ready to do more,” he said. “At the same time, we need to be careful….At a time of severe supply restrictions, an unconstrained fiscal stimulus does risk making the problem worse.”

(Reporting by William Schomberg; Writing by Kylie MacLellan; Editing by Leslie Adler and Jonathan Oatis)