The Bank of England “kept on printing money” after Covid, fuelling inflation, an ex-chief has admitted.
Andy Haldane, the bank’s former chief economist, has said officials were overzealous during lockdown, stating the measures needed to quell the economic uncertainty may have gone on too long.
Economists have long suspected that the bank’s policy of printing money and cutting interest rates helped spark double-digit inflation, with up to £450 billion pumped into the economy during the pandemic.
Threadneedle Street’s added Quantitative Easing (QE) policy – whereby the bank created electronic cash to purchase bonds – has also been blamed for causing price surges.
Mr Haldane has bolstered these claims, knocking Bank of England Governor Andrew Bailey just days before he is due to answer questions from MPs in the House of Commons.
He told Sky News that the Bank of England “kept on printing money for a bit longer than it needed to”.
And he concluded that with “the benefit of hindsight”, the bank “probably did a little bit too much for a little too long”.
He said: “I make no apologies about the greater sway of that easing – that was needed, I think, at the time of Covid to protect jobs and to protect thousands and to protect businesses.
“But did we persist with that a little longer than we needed to?”
“And did they step on the brakes a little too late – and therefore a little harder now than they needed to?
“I think that is probably where we find ourselves, regrettably.”
Mr Haldane’s statement is not likely to have been welcomed by Bank of England Governor Andrew Bailey, who is due to face MPs from the House of Commons Treasury Committee in a couple of days.
He will go before the committee on Wednesday, September 6, to give oral evidence on the Bank of England Monetary Policy Reports.
The committee meeting is a formality, with bank officials required to appear following the publication of its quarterly Monetary Policy reports.
The latest report came on August 3 and outlined that, while Britain’s inflation is too high, it is falling quickly enough to meet the bank’s two percent target by 2025.
Mr Bailey is one of four BoE officials due for questioning, as he will be accompanied by Sir Jon Cunliffe, the bank’s Deputy Governor for Financial Stability, Dr Swati Dhingra, an External Member of the Monetary Policy Committee and Elisabeth Stheeman, an External Member of the Financial Policy Committee.
