Liz Truss ramped up her criticism of the Bank of England last night as she warned policymakers against “talking Britain into a recession”.
The foreign secretary and frontrunner to succeed Boris Johnson as leader of the Conservative party dismissed forecasts from the Bank of England this week that Britain will slide into recession at the end of the year.
Speaking at a leadership hustings in Eastbourne, Truss said she was aware there were “difficult forecasts out there” but “forecasts are not destiny”.
“What we shouldn’t be doing is talking ourselves into a recession. We should be keeping taxes low,” she said.
She added: “We can create the British version of Silicon Valley. We can create real opportunities.”
Truss has maintained that slashing taxes and putting cash back in Brits’ pockets is the best way to boost growth and stave off a recession.
Her opponent Rishi Sunak has rejected the policy however, and backed the Bank’s move to hike rates.
“As the Bank of England said, they’re worried about inflation. If it becomes embedded then there’s no hope that we’re going to win that next election — absolutely none,” Sunak said.
“It’s as simple as that. All of you saw the numbers. And if we don’t get a grip of this thing . . . we’re in real trouble.”
The exchange came after business secretary Kwasi Kwarteng, a supporter of Truss, suggested the governor Andrew Bailey was wrong to claim that the central bank could not have foreseen soaring inflation pressures and should have moved faster to tame the rising cost of living.
Speaking on Sky News Kwarteng said while the bank was a “good institution” the government needed to “look again at what the mandate is and how best they can actually fulfil that mandate”.