Thursday 26th April 2007
An inflation rate of more than three per cent poses "a very big problem" to the UK economy, according to Kenneth Clarke.
The former Conservative chancellor told the BBC that inflationary pressures must be brought "under control" to avoid damaging the economy as a whole.
Speaking on BBC Radio 4s The World at One, Mr Clarke said: "Even when you have an independent bank, the chancellor of the exchequer and the governor of the bank should have regular informal meetings.
"They should each know what theyre doing and both of them has to play a part in making sure that inflation is kept down and that growth is sustained."
Meanwhile, Cass Business School professor Geoffrey Wood called for the Bank of England to restore inflation to its two per cent target figure.
He said on BBC Twos Newsnight: "The monetary policy committee needs to claw these rapid money growth numbers back to a sensible level."
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