BANK of England governor Andrew Bailey’s jacket is “on a shoogly peg” after he told the UK Parliament’s Treasury Select Committee that inflation had “turned a corner”.

Lord Willie Haughey, warning that “rampant” inflation was “in a place where it affects the rank and file every day of the week”, said that while it was good news that the rate of inflation had dipped from 10.1% to 8.7%, interest rates will still go up.

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“This is very confusing for consumers and for businesses, and food inflation is still rampant,” he added, noting that representatives from the food industry had attended a summit at 10 Downing Street to discuss the situation.

Lord Haughey said: “We have to get to the bottom of why some household items are 100% more [expensive] than they were six months go.”

Asked by Sir Tom Hunter if Mr Bailey, governor of the Bank of England and his team, were incompetent or if trying to make economic forecasts was difficult, Lord Haughey noted: “I don’t think it is difficult – I think they have their heads buried in the sand but hopefully they will get their act together.

“You cannot come in front of the Treasury Select Committee and get slaughtered. Your jacket is on a shoogly peg, as we would say in Scotland.”

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Sir Tom said he agreed with former Bank of England chief economist Andy Haldane – now an adviser to Prime Minister Rishi Sunak – who has suggested a pause in interest rate hikes to help the economy recover.

Responding to Mr Bailey’s prediction that the Bank of England forecasts inflation at 2% in early 2025, Lord Haughey said: “He is covering his bahookie – he has been so wrong in the past couple of years.

“If interest rates drop to 2%, I will eat my hat.”