Liz Truss tax plan sets up potential 'conflict' with Bank of England over inflation, IfS says ➡️ Truss camp says Bank would retain independence despite criticism and plans to review its mandate
Liz Truss’s multi-billion pound tax-cut plan would put her on collision course with the Bank of England at a time of deep economic crisis because it is likely to respond with higher interest rates to rein in runaway inflation, respected experts have said.
By contrast, Ms Truss’s “big package of tax cuts” would “boost demand”, putting “cash back in people’s pockets or back in companies’ bank balances”. Business Secretary Kwasi Kwarteng, who is backing Ms Truss for leader, also called for the Bank’s targets and operations to be reassessed. Mr Bailey said earlier interest rate rises could have damaged the UK’s economic recovery following the pandemic.
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