SENSITIVE data leaked by the Treasury could have fallen into “the wrong hands” and been used to profit off the markets, the head of the UK’s statistics office said yesterday in a scathing letter to the chancellor George Osborne.
The Treasury has sent confidential inflation data to around 400 recipients prior to its official release twice this year already, provoking the criticism of Osborne from statistics chief Sir Michael Scholar.
An investigation had to be held on a third occasion, after suspicious market movements were noticed before March’s surprisingly modest inflation figure. “There is a risk of market manipulation if key economic data falls into the wrong hands before publication,” Scholar wrote yesterday.
“And there is an inevitable perception among some people outside government that, with such widespread privileged access, there is opportunity for political manipulation of the statistical outputs.”
Osborne has performed a spectacular U-turn since coming to office last year, according to the letter. In opposition the Conservatives were against the dissemination of sensitive data within Whitehall prior to release, yet since coming into power have stuck with the system for the last year.
“Why do 50 or more people need to have the CPI a day ahead of the Opposition, Parliament, the public, and media?” Scholar asked Osborne.
There is “no good reason” Scholar said, yet accused successive governments of wanting “political advantage” so that they have “time to spin.”
“The risks of the present pre-release arrangements are considerable,” Scholar said.
The Treasury looked to play down the incident last night.
“This was an accidental breach by the official side of the Treasury, no ministers were involved and no-one made personal or political profit from this mistake,” a spokesperson said.
“The Treasury has put in place stringent measures to make it less likely this mistake will happen in the future.”
While the investigation into alleged market manipulation last month failed to find evidence of a leak, “there can never be positive proof that the suspicions were unfounded”, Scholar wrote. “So the damage to public confidence in these most important economic statistics remained,” he said, urging the chancellor to amend the rules over the dissemination of data.