With Britain gripped in a cost of living crisis, the former senior cabinet minister has attacked the Bank of England, which was made independent of Government by former Labour Chancellor Gordon Brown, for failing to understand the threat posed to the British economy. It comes as Chancellor Rishi Sunak has risked infuriating his Tory MP colleagues more by appointing another anti-Brexit economist to the Bank’s board.
The latest economic news has rocked the Treasury with GDP decreasing by 0.1 percent suggesting that Britain is about to plunge into a recession.
A record hike in energy costs of 54 percent has spiked inflation to 7 percent in the last month with the figure set to rise further.
Speaking in Parliament, Dr Fox blamed the Bank for failing in its duty to steward the nation’s finances.
The speech was the 30th anniversary of his maiden speech after first getting elected in the Conservative victory 1992 under John Major’s leadership.
He said: “It is almost universally accepted that the first duty of Government is the protection of its citizens. As a former Defence Secretary, I am only too aware of the many external threats to the safety of our people and our country, but there are other threats that I believe we have a right to be protected from: the debasement of our currency, the erosion of our earnings and the devaluation of our savings.
“I believe it is fundamentally wrong for Governments to engage in structural profligacy, spending excessively across the economic cycle and passing ever-larger amounts of debt on to the next generation.”
He went on: “I also believe it is the duty of central banks to safeguard the value of our money and our savings. The Bank of England persisted beyond any rational interpretation of the data to tell us that inflation was transient, then that it would peak at 5 percent. It has consistently underestimated the threat.”
READ MORE: Recession warning: Fears for crash after sudden plunge in growth
It comes as Chancellor Rishi Sunak has appointed an ardent critic of Brexit as one of his key policymakers infuriating many Tory MPs.
Mr Sunak has chosen Dr Swati Dhingra, an associate professor at the London School of Economics, to sit on the Bank’s rate-setting Monetary Policy Committee (MPC) despite criticism in recent years of an anti-Brexit bias on Threadneedle Street.
There has been pressure for the Government to instead find pro-Brexit alternatives to sit on board of the Bank who want to make Brexit a success.