The Bank of England governor said today fears that the bank cut interest rates earlier this month because it knew something others did not were unfounded.
"There was absolutely . . . nothing hidden in the woodwork. It was all in the minutes of the inflation report," Sir Edward George said in testimony to Britain's parliament Treasury Select Committee.
He said the main reasons behind the cut were weakness in the international economy, particularly in Europe, and uncertainty related to a potential war with Iraq.
"To be honest, I was surprised the market was surprised," Sir Edward said.
The BoE stunned markets earlier this month by chopping its benchmark interest rate to a 48-year low of 3.75 per cent.
Sir Edward also attacked again the excessive gloom of some commentators on the economy.
"The exaggeration and sensationalism in some of the media will actually impact on the confidence in an environment where confidence is extremely important," he said.
He also repeated that it was no surprise British interest rates were higher than in many other Group of Seven countries, given that Britain has the lowest unemployment rate in the G7 and stronger growth over the past few years.