Has Oborne discovered a Bank of England scandal?

In Peter Oborne's column in the Mail yesterday he reported the following:

At the end of 2006, the Bank of England pension fund made a sudden and very extraordinary decision. It sold all the equities in its portfolio and invested them in index-linked gilts - even though it realised that such a move would increase the annual cost of the pension fund by some £45million.

Looking back, this was a brilliantly farsighted decision because shares have since fallen in value by almost 50 per cent. It seems clear the the Bank of England fund managers understood the nature of the looming economic crisis well before anyone else.

At the time, they said their decision was based on concerns about 'unsustainable' positions in credit markets and the consequences of a possible credit crunch. When I put this story to a Bank press officer yesterday, it was dismissed as 'absolute nonsense'.

This does indeed pose some intriguing questions and I am surprised that there has not been more coverage of this in the MSM and on other blogs.

If there turns out to be any truth in this then I think it will increase the anger of ordinary people who are all sufferring, especially those who have recently retired or are due to very soon but who were not in a position to be able to forsee what was going to happen and thus make the decision to move out of equities in 2006.