UK Chancellor denies that government is set to clash with the BoE -FT

LONDON (Reuters) - Britain's finance minister Kwasi Kwarteng denied a suggestion made in an interview on Friday with the Financial Times that there was a contradiction between the government and the Bank of England when it came to policy matters.

In the interview, after laying out his mini-budget, Kwarteng said: "There have been two exogenous shocks: the COVID pandemic and (Russian President Vladimir) Putin's invasion of Ukraine. It's entirely reasonable in that context to have slightly looser fiscal policy to deal with those shocks."

"On the monetary side it's entirely reasonable for the bank to do what it classically does. It's not contradictory at all. We would not have done our duty had we not intervened in a fiscally liberal way to the COVID-19 pandemic and Putin's invasion of Ukraine."

Economists and investors said the new government led by Liz Truss was losing financial credibility after it set out tax cuts and huge spending plans just a day after the Bank of England raised interest rates to contain surging inflation.

(Reporting by Muvija; editing by Jonathan Oatis)