The House of Lords have criticised the Treasury for producing "over-optimistic" forecasts which is making it "more difficult than it needs to be" for the Bank of England to set interest rates.
A report published today by the House of Lords Economic Affairs Committee, on ‘The Current State of Monetary Policy’ also recommends the Bank of England should carry out more research into the link between rising house prices and consumer spending. The Committee, which includes two former Chancellors - Lord Lamont and Lord Lawson, states the over optimistic growth forecasts over the last five years has led to under-estimates of the budget deficit and borrowing requirements. As a result the report argues this situation has been unhelpful in setting interest rates and suggests this may hav...
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