, Columnist
The Bank of England Risks Hiking Too Far Ahead of the Fed
Reacting to the wrong type of inflation and slamming the brakes on economic recovery could result in self-inflicted harm for the U.K.
To the swiftest? Maybe not for central bankers.
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That was one sharp hawkish volte-face from the Bank of England. Over the weekend, three Monetary Policy Committee members, including Governor Andrew Bailey, made clear that they are ready to raise rates sooner rather than later. The U.K. government bond market really doesn't like it.
Gilts, which U.K. Treasury bonds are called, have been the worst-performing major fixed-income market over the past two months, with the 10-year yield doubling to 1.2%. That is not a vote of confidence in the Bank of England’s communication efforts.