6 Oct

Darling rejects Cable demands over Bank

Darling rejects Cable demands over Bank

Chancellor of the exchequer Alistair Darling has rejected a call to intervene in the decision making of the Bank of England's monetary policy committee (MPC) over interest rates.

Liberal Democrat treasury spokesman Vince Cable called on the chancellor at the weekend to change the remit of the MPC - which currently obliges it to concentrate on keeping consumer prices index at or near two per cent - and instruct the bank to cut the base rate.

Mr Cable said this would "clear the road" for a large rate cut, something that could boost the wider economy and also the mortgage market.

However, Mr Darling has rejected the call to intervene, saying of the MPC's task: "That remit was designed to deal with difficult times as well as the good times."

The debate about the remit comes at the start of a week in which the MPC will meet to decide the interest rate.

Last week's Adfero poll of economists and financial institutions found that seven of the 12 participants predicted a rate cut this week.

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