Carney and Vote Leave clash over EU battle

Mark Carney Image copyright Reuters

The Governor of the Bank of England has sent an angry response to one of the most senior figures in the Vote Leave campaign after being warned about rules banning "any public comment" in the run up to the referendum.

Mark Carney's three-page letter, obtained by the BBC, says that what senior Bank officials considered a "threat" contained "numerous and substantial" misconceptions.

It also says that there was a "fundamental misunderstanding" about the independence of the Bank.

It was written in response to a letter to Mr Carney from Bernard Jenkin MP, a director of the Vote Leave campaign and chairman of the Public Administration Committee. That letter has also been seen by the BBC.

Mr Jenkin said the Bank was governed by the pre-referendum "purdah" rules which prevent publicly funded bodies making public comments in the run up to the vote on June 23.

Senior figures close to the Governor said that Mr Carney had decided Mr Jenkin's letter - written on June 13 - needed a robust response.

Today, the Monetary Policy Committee of the Bank, chaired by Mr Carney, will publish its latest interest rate decision and the minutes of its meeting.

Those minutes are expected to contain a reference to the Referendum and the latest views of the committee on any economic effects the Bank believes are connected to the vote.

"I hope you will forgive me writing in response to concerns raised with me," the letter from Mr Jenkin to Mr Carney says.

"You have already made your views known about the question of the forthcoming referendum.

"The concern is that you, as Governor of the Bank of England, or others who serve the Bank, may have occasion to make further public comment on matters arising from the question on the ballot paper for the referendum."



Legal advice

Mr Jenkin says that he has "no doubt" that the Governor is aware of the purdah legislation.

"You are prohibited from making any public comment, or doing anything which could be construed as taking part in the referendum debate," the letter continues.

"I have taken legal advice from Speakers' Counsel . . . [and] wanted to take the opportunity to stress the importance of this matter.

"I very much hope you will avoid doing anything which could suggest you or the Bank have disregarded Parliament's wishes."

Mr Carney wrote back to Mr Jenkin, saying that he had not "made my views known" on the referendum.

"Nor do I intend to share my private opinion other than via the anonymity of [the] ballot box when I join millions of others to cast my vote," the letter says.

"All of the public comments that I, or other Bank officials, have made regarding issues related to the referendum have been limited to factors that affect the Bank's statutory responsibilities and have been entirely consistent with our remits."

Mr Carney said that Mr Jenkin's letter "demonstrates a fundamental misunderstanding of central bank independence" and that the Bank has "a duty" to report its "evidence-based judgements" to Parliament and the public.

'Accountability'

He also said that the Bank was not officially covered by the purdah rules but has "voluntarily" agreed to be bound by them "in the spirit of the guidelines issued by the Cabinet Office".

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In its regular Inflation Report and in evidence to MPs, the Bank of England has warned about the economic impact of Britain leaving the EU.

The Governor last month said there could be a short term economic shock leading to a "technical recession", which would be six months of negative economic growth.

The comments drew an angry response from the Vote Leave campaign, with one MP, Jacob Rees Mogg, calling on the Governor to resign.

"Transparency is a hallmark of Parliamentary accountability," Mr Carney's letter says.

"In the future I would be grateful if you would do me and my fellow independent committee members the courtesy of consulting the public record before writing letters such as that which I received on Monday."

Response

The first response from the Stronger In campaign to the BBC's story on Mark Carney's clash with Vote Leave comes via the former chancellor and remain campaigner, Alistair Darling:

"This is a blatant attempt to muzzle a respected independent voice.

"The Bank of England is independent, the Governor is independent and he has a duty to say what he thinks.

"It is very clear the Leave campaign doesn't want people to hear what the Bank has to say on the most critical issue facing our generation because they don't like its conclusions."

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