WASHINGTON Oct 7 British finance minister
Philip Hammond sought to quash speculation that the government
wanted to influence the Bank of England after the country's
prime minister highlighted the "bad side effects" of its record
low interest rates this week.
Hammond said the BoE remained independent and the government
had no plans to change its mandate.
"The government does not... plan to change the remit of the
Band of England," he told reporters in Washington where he was
attending meetings of finance chiefs from around the world at
the International Monetary Fund.
British Prime Minister Theresa May took the unusual step of
commenting on central bank policy on Wednesday when she said
near-zero rates and the BoE's huge bond-buying programme had
"The PM was commenting on the impact of monetary policy...
essentially setting out a fact," Hammond said on Friday.
He also said he might wait until March before announcing his
new deficit reduction plan.
May and Hammond have already dropped the plan of former
finance minister George Osborne to turn Britain's budget deficit
into a surplus by 2020 although they have said they do intend to
get the public finances back into the black at some point.
Hammond did not comment on an overnight 'flash crash' in
sterling but said its decline earlier this week was due to
markets taking on board that Britain's government definitely
intended to take the country out of the European Union.
"Perhaps what happened this week is the final shoe dropped,"
he said, adding that the market reaction was "part of a pattern
of turbulence I would expect to see".
Hammond said the government had no plans to start the sale
of shares in state-owned Royal Bank of Scotland because
of an investigation by the U.S. Department of Justice into the
alleged misselling of U.S. mortgage-backed securities and delays
in the sale of unit Williams & Glyn.
Also, market conditions were not right for the sale, he
Earlier on Friday, Britain's government said it will resume
selling its residual 3.6 billion pound ($4.5 billion) stake in
Lloyds Banking Group, which it has held since bailing
out Lloyds and RBS during the financial crisis.
(Writing by William Schomberg; editing by David Milliken)