BoE's Bailey says he might scale back policy guidance further

BoE's Bailey says the line between commentary and guidance is murky
BoE's Bailey says the line between commentary and guidance is murky Copyright Thomson Reuters 2021
Copyright Thomson Reuters 2021
By Reuters
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LONDON - Bank of England Governor Andrew Bailey said on Tuesday he might further scale back guidance on central bank policy and the central bank could return to stating that decisions would be made on a meeting-by-meeting basis.

Speaking to the House of Lords Economic Affairs Committee, Bailey reiterated that he was not a fan of the type of 'forward guidance' deployed by his predecessor Mark Carney, and that even existing explanations of the BoE's world view might be too much.

"We will keep under review what I would call the boundary between giving the kind of signal that we gave three weeks ago - which essentially said 'here's our view of the world ... this is what follows from it'.

"There is an alternative view, which is we should go meeting by meeting and not give any guidance. That is not off the table by any means. That is very well trodden ground by the MPC and I could imagine us going back to it."

Financial markets interpreted remarks made by Bailey in October as a signal that rates would rise this month - something the BoE did not do - rather than as more general guidance that rates were on an upward path.

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