Mark Carney has defended the Bank of England's Brexit analysis as he faced accusations of becoming "politically involved" with the EU referendum in a tense hearing in front of MPs.
Conservative MP Jacob Rees-Mogg accused the chancellor of making unprecedented political interventions of the kind that would be impossible before a general election. Carney fired back in an explosive exchange which saw the governor point blank refuse to acknowledge the Tory MP's questions and apologise for presenting analysis that was "inconvenient" for the Brexit camp.
Carney said it was impossible for the Bank to consider the myriad different outcomes of a general election, but the EU referendum presented a "discrete" option that it was possible for the Bank to study.
In response, Rees-Mogg said: "Your comparison is false … and this is where you seem to have become very politicised."
Rees-Mogg then asked the governor to reveal details of his meetings with George Osborne and put accusations to Carney that Threadneedle Street had come under pressure from the chancellor to publish pro-EU analysis.
But Carney was resolute, insisting that "there is no possibility of undue influence coming from the Treasury," before adding: "There is no possibility of effective influence … even if it had been tried," raising questions about the substance of conversations between Osborne and Carney.
The governor of the Bank of England said he was "not supporting government policy", but was legally required and expected to talk about risks to the UK economy both to the public and the chancellor.
"I am mandated [to highlight risks] under the remit of the Financial Policy Committee (FPC), if, as is the case, the FPC views the risks around the referendum as the biggest domestic risk, I am statutorily obliged to have conversations with the government about that," Carney said.
"We also have a broader responsibility to the British people, who don't want risks kept from them, they expect us to come straight … and to take action to the extent possible to mitigate them."
Rees-Mogg, however, was unimpressed: "I think you have become politically involved … why should anybody trust you to set interest rates?"