The Bank of England Is Right to Snub Calls for Emergency Action
The central bank risks exacerbating market volatility if it intervenes off schedule.
Governor of the Bank of England Andrew Bailey.
Photographer: YUI MOK/AFPThe Bank of England’s next scheduled monetary policy gathering on Nov. 3 is a long, long way away. With the pound dropping to a record low against the dollar this week and UK borrowing costs surging, market soothsayers have called for an inter-meeting intervention. But Governor Andrew Bailey has resisted that temptation — and he’s right not to fall into the trap traders are setting for him.
On Friday, the government revealed the biggest suite of tax breaks in half a century, and Chancellor of the Exchequer Kwasi Kwarteng promised “more to come.” That fiscal giveaway, combined with energy-bill compensation for households and businesses that will cost £60 billion ($64 billion) in the next six months alone, has rattled sterling markets, with the pound bearing the brunt of investor unease.