Bank of England’s Mark Carney in war of words with Theresa May

Mark Carney - credit PA

Mark Carney today hit out at criticism of the Bank of England in a thinly-veiled attack on Theresa May.

The comments come after the Prime Minister used her speech to Conservative party conference to criticise his methods of supporting the British economy.

Carney’s ‘monetary policy’ had resulted in some “bad side effects”, she said.

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She told conference “super-low” interest rates and quantitative easing meant people with assets had got richer while “people with savings have found themselves poorer”.

But Carney today said criticism of the Bank’s monetary policy was a “massive blame defection exercise".

Asked by MPs on the Treasury Select Committee about similarities between US president elect Donald Trump’s and May’s criticism of central banks, Carney said:

“It’s very important to distinguish between the stance of monetary policy and the reasons why global interest rates are low, the reasons why inequality has increased across major economics.

“Those are caused by much more fundamental factors. And an excessive focus on monetary policy in many respects is a massive blame deflection exercise.”

May told her party conference in October that a “change has got to come” on monetary policy.

"While monetary policy – with super-low interest rates and quantitative easing – provided the necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects,” she told activists in Birmingham.

"People with assets have got richer. People without them have suffered. People with mortgages have found their debts cheaper. People with savings have found themselves poorer.

"A change has got to come. And we are going to deliver it. Because that’s what a Conservative Government can do."

Elsewhere during the hearing, Mr Carney reiterated that he will step down from his role on 30 June 2019 regardless of the Government's progress on Brexit.

He also revealed that former chancellor George Osborne earlier this year asked him to extend his stay for a further three years.