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Parliament: Brown praises Bank over inflation success

FINANCE

Diane Coyle
Wednesday 20 January 1999 00:02 GMT
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GORDON BROWN, speaking before a House of Lords Committee yesterday, praised the Bank of England for getting inflation close to or on its target for the past six months.

The Chancellor was speaking on the day inflation climbed above the Government's target level of 2.5 per cent for the first time in five months. He also defended members of the Bank's monetary policy committee against charges that they were remote from manufacturing industry. They are"highly professional and not constrained by the narrow interest of pressure groups," he said. Mr Brown said he would reaffirm the existing inflation target in March's Budget. He said the harmonised European measure would be monitored alongside the existing measure, the retail price index less mortgage interest payments. But he had decided it was not the right time to switch.

Eddie George, the Governor of the Bank of England, offered some comfort to those hoping the monetary committee will reduce the cost of borrowing for a fifth successive time.

In a radio interview yesterday, Mr George said it would be right to continue with more moves in the same direction if there was more uncertainty in the world economy.

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