Bank of England Governor Andrew Bailey will face questions over his leadership on Monday following his policy towards the cost of living crunch.
Tory MPs on the Treasury Select Committee are expected to probe Bailey on why he has allowed inflation to reach a 30-year high at seven per cent, as well as push him on forecasts that this number is set to rise to double figures later this year.
The Bank has largely pointed to price hikes, the war in Ukraine and international supply chain woes as the main drivers for inflation.
The governor said the rising cost of living is also being underpinned by the UK having “a very tight labour market” that is putting upward pressure on wages and strengthening incentives for firms to hike prices to protect margins.
On top of this, Bailey has been criticised for spearheading a muddled communications strategy – seen as a key tool in a central bank’s arsenal for delivering effective monetary policy.
Questions continue to loom for the House of Commons after a senior official at the monetary authority said that more rate hikes are on the way this year.
Sir Dave Ramsden, a member of the Bank’s monetary policy committee, told households to brace for higher borrowing costs despite new figures released today revealing the economy is reversing.
“I don’t think we’ve gone far enough yet on bank rate,” Ramsden said in an interview with Bloomberg News, adding that a succession of four rate rises are “having an impact” on easing inflation.
Threadneedle Street has lifted borrowing costs from a record low 0.1 per cent to a 13-year high of one per cent in just six months in response to prices accelerating seven per cent, the quickest pace since the early 1990s.