Bank of England took ‘eye off ball on inflation’, says Jenrick
Robert Jenrick is set to make his first major pitch to the City, in his first major outing as Reform’s spokesman on Treasury matters.
The Newark MP is expected to commit to the independence of the Bank of England but pledge to “strip the Bank of distractions which have been loaded onto it”.
“We will demand that the Bank must be a more open institution, and the private sector better represented on the Monetary Policy Committee,” the party’s spokesman said.
Farage’s top team have vocally pushed for mammoth reforms to the central bank in the last year with the party leader lashing out at “dinosaur bureaucrats” at the Bank over views on stablecoins.
Jenrick will accuse the Bank of “taking its eye off the ball on inflation” and take a swing at “excessive quantitative easing”.
Reform has criticised the quantitative easing (QE) programme, which refers to the Bank creating billions of pounds to buy UK bonds from commercial lenders in a bid to help keep interest rates low and support the economy.
After rounds of QE following the 2008 financial crisis and then after the eurozone debt crisis, the Brexit referendum and pandemic, the Bank has kicked off a quantitative tightening programme, where it sells the bonds for less than it paid for them.
To pay for the initial bonds, the Bank of England created new central bank reserves for the commercial banks, on which it paid interest at its official rate. Reform have criticised the profits generated by the big banks after this measure following soaring interest rates.
Farage has said a cash raid on these profits would not qualify as a tax and instead mean the banks were “not going to get free money anymore”.
Jenrick to oppose ‘wrecking ball’ Reeves
In his City debut as Reform’s ‘shadow chancellor’ Jenrick is also expected to back the Office for Budget Responsibility (OBR), stating the party is “happy to have [it’s] homework marked”.
“The OBR is far from perfect. But the impetus for its creation was a desire to instill fiscal discipline, and that is something we wholeheartedly endorse,” he will add.
“Rather than abolish it, we will reform it. We will break up this cosy consensus and ensure it has diversity of opinion.”
Jenrick will say Reform will “run competitions for superforecasters” to join the OBR and pay “competitive salaries to those who most accurately model the impact of Treasury decisions.”
Reform announced its shadow cabinet during a Westminster press conference on Tuesday.
Jenrick clinched the Treasury brief after speculation it was an area party veterans Richard Tice and Zia Yusuf had been interested in.
After being unveiled as the party ‘shadow chancellor,’ Jenrick thanked Farage for allowing him to “oppose the wrecking ball that is Rachel Reeves” and pledged to put together the most “comprehensive plan” to fix the UK economy.