'Pretty Much Bollocks': A Journalist Shuts Down Government Excuse For Chaos

Gillian Tett gives a blunt assessment on whether the Bank of England is to blame for the turmoil, as Jacob Rees-Mogg has suggested.

A Financial Times journalist has offered a withering assessment of the government’s suggestion that the Bank of England is to blame for the recent chaos in the markets.

On Tuesday, business secretary Jacob Rees-Mogg suggested the central bank’s failure to raise interest rates in line with the US was driving the financial turmoil rather than chancellor Kwasi Kwarteng’s mini-budget.

But Gillian Tett, the Financial Times US editor-at-large who made her name for her prescient commentary on the 2008 financial crash, has said – bluntly – that this was really not the case.

Appearing on Channel 4 News, and asked for a verdict, Tett said: “To use a non-technical term, that is pretty much bollocks.

“I think for the most part it really was the budget and the way it was delivered and the message inside, which sparked the beginning of the crisis.

“The Bank of England certainly is to blame for not having prepared for these kinds of dislocations. The British pension funds appear to have been somewhat asleep at the wheel in terms of their risk management systems.

“But at the end of day, the spark that lit this fire was very much the budget announcement.”

Earlier, Rees-Mogg argued the market response was “much more to do with interest rates than it is to do with a minor part of fiscal policy”.

On September 22 the Bank’s Monetary Policy Committee (MPC) raised rates by 0.5 percentage points to 2.25%, but the day before the Federal Reserve raised rates by 0.75 percentage points.

But economists insisted that the government’s decision to increase borrowing without any plan to balance the books was a major factor.

The cost of government borrowing increased on Wednesday while sterling fell against the euro and dollar in the latest signs of market turbulence.


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