Mohamed A. El-Erian , Columnist

Why We Should Pity the Bank of England

The UK central bank faces a more acute set of challenges compared with those confronting the ECB and the Fed.

July 31, 2023 at 4:00 AM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

Governor of the Bank of England, Andrew Bailey.
Photographer: WPA Pool/Getty Images Europe

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The Bank of England finds itself in a tricky position leading up to this week’s policymaking committee meeting, alongside its counterpart, the Bank of Japan.

Among the major global central banks, they both face the most intricate monetary policy challenges. However, unlike the Bank of Japan that acted last week and is able to contain the immediate damage from policy hesitancies and possible missteps, the BOE doesn’t have the luxury of time to experiment with policy responses. Even if it meets market expectations on Thursday by raising its interest rate by 25 basis points, in line with what the European Central Bank and the Federal Reserve did last week, it remains exposed to a more bumpy inflation path, greater political criticism, and faltering growth momentum for the UK economy.