Letter: Chancellor's act of 'good faith'

Sir: Diane Abbott MP (Letters, 14 May) argues that there is no causal relationship between "central bank independence and low inflation". She would of course be correct if the Conservatives were still in office. Sadly, the history of financial institutions and the money markets under Labour governments is one of mutual distrust and suspicion - therefore this Labour government needs to prove its integrity and competency.

Labour was not elected on a programme of wholescale reform of the "commanding heights" of the economy. It was elected to deliver pragmatic economic and social policies acknowledging the economic constraints imposed on an individual nation state. With this in mind, the Chancellor's move to allow "symbolic" freedom for the central bank to set interest rates is an act of good faith.

Councillor JEREMY KILLINGRAY

London Borough of Hackney (Lab)

London E8