Government Is Undercutting UK Institutions: Former Bank Governor

Mark Carney, a former governor of the Bank of England, has accused that the government is "undercutting" the main economic institutions in the United Kingdom UK. According to Mr. Carney, the Bank and the government's tax-cutting initiatives are "working at some cross-purposes" 

He also cited the Office for Budget Responsibility's (OBR) decision not to release economic estimates along with Friday's "mini-budget". Financial markets were shaken by the mini-budget, which also hurt the pound.

Government bonds' value had been halved as a result of investors' demand for a considerably larger return on their investments. Bond-investing pension funds were compelled to start selling, raising concerns about a new market meltdown.

 In an effort to stabilize the markets, the Bank of England announced on Wednesday that it will purchase £65 billion worth of government bonds over the next two weeks.

On Monday, the value of the pound against the dollar reached a historic low of about $1.03. Following the Bank's pronouncement, it has now increased to roughly $1.08 and has stayed there ever since Prime Minister Liz Truss declared that she will uphold the policies outlined in the mini-budget.

However, the cost of borrowing from the government increased somewhat, increasing the yield on 10-year government debt."There was an undercutting of some of the institutions that underpin the overall approach - so not having an OBR forecast is much-commented upon and the government, I think, has accepted the need for that but that was important." he added.

The OBR offers unbiased forecasts of how the government's plans will affect the economy and public finances. The Treasury's decision to withhold its predictions on Friday contributed to the market's turbulence.