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BoE threw GBP3,000 bash, then cut rates

Press AssociationPress Association 2/10/2016

The Bank of England has been blasted for splashing out more than GBP3,000 ($A5,000) on a lavish retirement bash for former rate-setter Martin Weale, just a week before slashing interest rates.

The Old Lady of Threadneedle Street spent GBP3,324 on a retirement reception for the ex-monetary policy committee member, who stepped down on August 8.

Weale was also presented with a bound set of speeches covering his tenure, costing the bank a further GBP416.

The celebrations were held at the bank on July 26, just nine days before it slashed the cost of borrowing for the first time since March 2009 to a historic low of 0.25 per cent.

External monetary policy committee members were handed a 7 per cent pay rise by the bank in 2015/16, increasing their annual pay to GBP148,200.

The figures were released by the bank following a freedom of information request by the Press Association.

John O'Connell, chief executive of the TaxPayers' Alliance, said: "This is a slap in the face to all those who have struggled under the Bank of England's policies.

"Savers have had very little to celebrate over the last eight years because of rock bottom interest rates and many will find it in particularly bad taste that staff see fit to throw lavish parties and dish out extravagant gifts."

The central bank is no stranger to expensive soirees after spending more than GBP13,000 on retirement parties for Mervyn King when the former bank governor retired three years ago.

It also spent in excess of GBP13,000 on presents for King, including GBP10,000 on a copy of a painting of the former bank governor, GBP2,505 on a replica bust of German writer Johann von Goethe and GBP597 on a silver napkin ring.

The bank's decision to slash the cost of borrowing from 0.5 per cent to 0.25 per cent in August heaped further misery on savers who have been grappling with low returns since the financial crisis.

Since then, the bank said the interest rate cut had helped support the financial system and kept bank funding conditions broadly stable following the EU referendum result.

The Bank of England declined to comment.

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