Can the Bank of England get it right?

The latest addition to the Monetary Policy Committee is an economist who mainly tweets on Greece and the USA. She comes to the task with some scepticism about the lurch from Quantitative easing to Quantitative tightening and with an understanding that tight money policies bring recessions. This scepticism is going to be much needed as she listens to the group think that brought us 10% inflation against a target of 2% and then forecast a five quarter slump. The Bank has a long history of getting it wrong. It has specialised in boom/bust policies all my adult life. It has a habit of running easy money for too long to get inflation up, then for overcorrecting to  get it down doing great damage to jobs, output and sometimes to banks.

They recommended the European Exchange Rate Mechanism, the ultimate wild ride boom/bust machine. In the 1980s it meant selling pounds, keeping interest rates low and fostering excessive sterling money and credit, to be followed  by buying up pounds, hiking rates too high and creating a big recession. The government, Opposition and CBI all supported this madness. I took the quoted company I led at the time out of the CBI at the start of this misery in protest at the policy.

They allowed low rates and fast money growth in the period 2004-7, telling us big banks had new ways of controlling risk which made it fine for them to lend large sums in relation to their capital. Then in 2008 they turned round and blamed the banks for the excesses they had helped engineer, hiked rates and watched as a banking crash unfolded, followed by the Great recession. Many of us predicted the folly of overexpanding credit and borrowing in the run up to the crash.

They rightly created plenty of money and bought bonds to depress rates during the covid lockdown of 2020, but then added fuel to the inflationary fires by carrying on with Quantitative easing throughout 2021 when some of us were telling them it would be inflationary. Inflation hit 5.5% before the invasion of Ukraine which they solely blame for the inflation that was  inherent in their policy choice, and was absent in Japan and China despite energy prices.

Now they are following the austerity policy of Quantitative tightening long after their own forecasts tell them there will be a recession and inflation will tumble. Why? Either the forecasts are completely wrong or the policy is wrong, or both. My view is they  have done enough to bring inflation down next year. They should tighten by not replacing bonds they own when they repay, but they should not be selling more bonds at a loss.


  1. Mark B
    April 15, 2023

    Good morning.

    This scepticism is going to be much needed as she listens to the group think . . .

    I thought this is the reason why Gideon Osborne created the OBR. Now another pit of (Lefty) Group Think.

    So another government post is created out of thin air. I wonder what her pension pot will cost us ?

    What was it someone recently said ?

    “We don’t have a cost of living crisis, we have a cost of government crisis !”

    1. Ashley
      April 15, 2023

      The most expensive thing most people buy in their lives is not their houses but the cost of government. They get very little of much value back from the latter.

      1. Bloke
        April 15, 2023

        What people buy is normally a desirable purchase.
        Government is often an unwanted charge or a penalty fine.

      2. Ian wragg
        April 15, 2023

        She’s a rabid remainer and a Democrat. The obvious choice for Fishy and his Chicom neighbour

      3. Narrow Shoulders
        April 15, 2023

        Even in feudal times the Lord of the Manor allowed their serfs to keep 50% of what they farmed

    2. Peter
      April 15, 2023

      Nothing much on Pentagon leaks by a 21 year old.

      Apparently there is no Ukraine success. The exact opposite is the case. US troops are already on the ground too.

      Reaction is shoot the whistle blower rather than address the claims.

      UK has no strategic interest here and vast cost of support is not justified.

  2. turboterrier
    April 15, 2023

    Hopefully she will be one of these people so rare today that gets out from the group and walks, talks the talk and gathers the information and data about life out here in the so called real world.
    With any luck Sir John you and some of your like minded colleagues will be given the opportunity to give your fears and perceptions on the terrible waste of money and resources. Do they still do business breakfasts?

    1. Nottingham Lad Himself
      April 15, 2023

      Anyone care to reflect upon interest rates and policy when the Bank was under direct Tory control?

    2. a-tracy
      April 15, 2023

      Turbo, I was going to say the same thing. I wonder if she is smart enough to engage with economical minded and trained MPs. Preferably the conservative ones as those are the people we did elect with a big FAT MAJORITY! Anyone would think we had elected socialism.

  3. Jigl
    April 15, 2023

    Article from Charles Moore in the DT. Why after 13 years are we still governed by left wing policy?

    Why is there no pushback against the BOE. Jelly spined HMG I guess.

    And in other news Hunt wants higher returns from pension funds. Don’t we all. Maybe he could switch some of the public sector gold plated money, increasing far faster than the rest of us. Obviously a political stunt. Could someone whisper in his ear that higher returns equals higher risk.

    This is at a time when he has increased dividend tax on people’s portfolios and frozen allowances luring more people into paying income tax.

    So he wants better pension returns whilst, err reducing them through personal taxation. More boleaux.

    1. Ashley
      April 15, 2023


  4. Gabe
    April 15, 2023

    Indeed she sounds like another totally deluded lefty “economist”, some quote from her even suggesting that she thinks the UK is not over regulated! Surely that alone shows she is unsuitable for the job. Does she perhaps also think the UK is not over taxed, has a wonderful NHS, the state sector is really rather too small but very efficiently run and Net Zero is vital and just need to be speeded up further as energy prices are still too low? I assume she like most people in government posts and politics has no understanding of physics or other science.

    Interesting to read about Starmer’s vast travel expenses while at the DPP. Not quite up to King Charles levels of “do as I say not as I do” hypocricy but nearly there – clearly he cannot not really think there is any climate emergency! It included a £4,914 flight to Hong Kong, a £6,808 flight to Washington DC and business and first class flights to Jamaica, Thailand, and South Africa. Also nearly £2K per week for a chauffer driven car to take hin from Kentish Town to the office about 4 miles to the DPP office. Is this not a benefit in kind? Did he pay tax on it or was he using some tax loop hole? Or did he have some special arrangement as he did for his pension. How many other people in government have this “special arrangements”?

    For say a junior doctor travel to and from work is paid out of you taxable income. Just the £2K chauffer costs are over three times the pay of a new Junior Doctor. Why study for 6 years when you can just set up a chauffer service and earn three times as much?

    1. graham1946
      April 15, 2023

      And a nurse on radio this morning going in for a 12 hour shift, said she pays £5 per day from her taxed income to park her car at the hospital. Outrageous!. Rees Mogg recently been saying the junior doctors are well paid for getting 34 grand after a year’s service and umpteen years of study. Would he remind us just what qualifications are needed to be an MP and what they get from day one? Of course not, his parliamentary salary is probably petty cash to him with his wealth. They are all deluded and don’t live in our world at all.

      1. Ashley
        April 15, 2023

        They also pay the interest and student loan back from taxed income. For doctors this can be £150K of debt after 6 years and £10K of interest.

        John Taylor, Baron Taylor of Warwick was strongly criticising the doctors they other day on GBnews. Lords get £332 tax free a day (just for signing in or getting a subsidised drink or lunch). New Junior Doctors get about £80 after tax a day but they have student loan interest & capital, parking charges, commuting costs, prof. organisation charges…so perhaps end up with about 1/8 of what the good Baron gets. They actually have to work the full day in a stressful and often dangerous job too.

        1. Gabe
          April 15, 2023

          Plus they are almost certainly brighter and rather more use to society.

    2. a-tracy
      April 15, 2023

      What other jobs pays full travel costs into the normal place of work? A junior doctor in my region earning the £34k FY1 average is doing rather well, they also get paid study leave (7 years), generous holidays, a 20% employer pension contribution (which guarantees them a defined BENEFIT pension, based on their average pay over 13 weeks. There are plenty of low cost housing and rentals near the two hospitals.

      Scottish and Welsh doctor trainees don’t have student tuition fees for their first 4 years of study they are minting it in 9% better off with every £ over £17k if they’re on plan 1, yet they’re still on the picket line. This national collective bargaining is a joke and if somewhere like Oxford is as expensive as London to live and work then it is causing a massive imbalance, however, other areas that I see being the most vocal on picket lines, their start wage is a lot more than that areas average wage and their living costs are low in comparison.

      1. Gabe
        April 15, 2023

        The usual trick is to make your home your normal places of work then everywhere else you go can usually be tax deductible. Also claim a fair % of the housing costs heating, lighting, water, council tax, repairs, insurance, Mort. interest – as much as you legally can do.

        MPs get (first class I assume) travel from their constituency to Parliament and free parking, this all paid out paid on top of wages and tax free. Unlike ordinary people just on the minimum wage. Not sure why Starmer can claim £2,000 PW for travel to work without this being a benefit in kind but perhaps he can explain which tax loophole he perhaps exploited here?

        Reply Not first class. I pay for my own car and do not claim travel to Parliament.

        1. a-tracy
          April 15, 2023

          I wonder if junior doctors are classed as ‘students’ for all of the extra years as junior trainee consultants, in that way would they get student benefits such as student rail tickets, discounted computers?

          I’ve always found it quite odd that we allow inexperienced twenty year olds to become MPs. There are fortunately many with comprehensive qualifications and work experience before they attempt this serious undertaking.

  5. Anselm
    April 15, 2023

    I am completely lost. What is selling bonds at a loss?

    I understand that if you “print money” then you get inflation.
    I understand that if money costs a lot to borrow, all those who have been swimming without a costume will be left naked and exposed when the tide goes out.
    I understand that the government needs to get money by borrowing (leverage) secured by later tax collection. this is does by selling, at interest, bonds.
    I thought the Bank of England was totally independent of government, fiercely guarding our currency.
    That is it.

    Is it because I is thick?

    1. Ashley
      April 15, 2023

      Any organisation that feels the need to claim it is “independent” almost never is. Witness the dire BBC.

    2. Peter Wood
      April 15, 2023


      Have read of this:,what%20happens%20in%20the%20economy.

      It explains QE and QT, as well as anyone has. The BoE bought gilts at very low yields and sold them at higher yields, when interest rates, set by them, were increased. Low yield – bond price high, high yield – bond price low.

      1. a-tracy
        April 15, 2023

        Why did it have to sell and not hold their position or even buy up more as the bond price dropped?

  6. Ashley
    April 15, 2023

    The “pointless, vastly expensive & totally counterproductive” Covid lockdowns you should perhaps add.

    From the ONS – The number of (all cause) deaths registered in the UK in the week ending 31 March 2023 (Week 13) was 13,137, which was 19.6% above the five-year average (2,156 more deaths); of these deaths, 729 involved COVID-19.

    19.6% up! 307 excess deaths every day four Grenville Tower Disasters each day. So Sunak (PPE) and Steve Barclay (History and Law ) what are the causes of these and what is being done to find out? Are you remotely numerate? Is it Vaccines damage, people unable to heat their homes for freezing to death due to net zero, delays and incompetence in the NHS and ambulances, suicides, long Covid…?

    My money is on “vaccine” damage as the largest cause. Post the many Covid deaths this should be below average too certainly not above. Also note most of the “involved COVID-19” deaths we not actually caused by Covid at all.

    1. matthu
      April 15, 2023

      More to the point, why is the House of Commons virtually evacuated whenever this topic is debated? Why are our MP representatives so reluctant to explore this issue?

      1. Sir Joe Soap
        April 15, 2023

        Non-scientists should indeed avoid discussions where numeracy and scientific analysis is required. It should happen far more often, then they could be replaced by numerates.

      2. Hat Man
        April 15, 2023

        Why did MPs run away from hearing Andrew Bridgen, Matthu? Because their last hope when the chickens really come home to roost will be to say: “Sorry, I didn’t know”.

        1. Ashley
          April 15, 2023

          They even withdrew the whip from him for his crimes of essentially merely pointing out the reality of the numbers.

      3. Iago
        April 15, 2023

        There is another debate on Monday. The World Health Organization is proposing the adoption of a ‘Pandemic Treaty’, now called a ‘Pandemic Accord’. On Monday, 11 months after a UK petition calling for a debate on the matter reached the threshold of signatures to require a debate in Parliament, this will take place. A few weeks from now the government will agree to the Accord and give the sovereignty of this country and the freedom of its people to this UN organization, headed by the marxist Dr. Tedros and controlled by the Chinese communist party. The WHO will then be able to declare a pandemic and order counter-measures in this country, such as the enforced injection of people and their children with whatever they decide and digital travel ID.
        I expect few MPs will attend the dabate on Monday. John Redwood has shown, so far as I am aware, no interest in opposing this.

        Reply I have made clear my opposition to this WHO power grab, alerted Ministers to its dangers. The problem is the Opposition parties support any sell out to international bodies and treaties so it does need Ministers to stop it as the Conservative MPs like me who oppose it cannot vote it down as it has Lab/Lib support

        1. Wanderer
          April 15, 2023

          Yes, terrifying piece about it on TCW today. Any MP voting for it (if they get the opportunity) is utterly dishonourable. Glad to hear our host opposes it.

        2. R.Grange
          April 15, 2023

          Currently Tory MPS: 354, all other MPs, 293.

          So the problem, SJR, is not so much the opposition, surely. Isn’t it the other MPs in your party who disagree with you and ‘support any sell out to international bodies and treaties’, to quote your words?

      4. Ashley
        April 15, 2023


    2. Sir Joe Soap
      April 15, 2023

      Yes. The underlying causes of today’s piece are rarely mentioned.
      ERM would never have worked in the UK mainly because low interest rates here = massive property boom, then equity release and inflation, whereas in Germany low rates promoted business investment. Had there been encouragement to invest spare income in business here and discouragement to buy up rows of houses to let out then we might have created a virtuous spiral in business investment and there wouldn’t have been a need now to stamp on landlords. The BES scheme of the late 80s/early 90s was the last attempt at that, I think. Again the Irish copied the scheme and kept it longer then we did.
      The more immediate issue is the 2020 “justified” money printing. Well it wouldn’t have been needed if there had been a more thorough analysis of this infection early on, and it was clear by circa end April 2020 that the whole thing had been over-hyped. No furlough would have meant no money printing.
      So the BOE is only at fault in the way the fire-people are at fault for having difficulty extracting passengers and removing the wreckage after a road traffic accident. Experienced driving would have avoided the RTA in the first place.

    3. Christine
      April 15, 2023

      Don’t worry our PM will soon sign away our medical autonomy to the WHO and our financial autonomy to the UN. Our Government will not be at fault for anything. One Global Government is soon to be a reality. With Tony B spouting his opinion at the Pandemic Policy Summit and lining himself up to replace Schwab as head of the WEF our future is rosy. Only Andrew Bridgen is calling this out whilst the sheep at Westminster sit idly by as our sovereignty is further eroded.

      1. Sharon
        April 15, 2023

        Us For Them, Together Declaration and PANDA are on the case of the WHO pandemic preparedness government takeover on health!

    4. Ashley
      April 15, 2023

      Is very easy to find out the causes of all this excess deaths. Just look at the causes of death, what if any vaccines they had, had they had Covid, ages and look at the temporal details in relation to the vaccine roll out as they were rolled out by age. Rather frightening that the excess deaths do not seem to be declining. At least the Swiss have sensibly stopped all vaccines other than very specially cases alas the UK is still pushing them. Surely this is criminal negligence at the very least for younger people.

  7. Sakara Gold
    April 15, 2023

    Gold and silver priced in many major currencies broke to new multi-month highs against a falling dollar last week, as fresh US inflation data said pricing pressures are easing back in the world’s largest economy, boosting bets that the Federal Reserve will start cutting interest rates this summer.

    Western stock markets rose with longer-term bond prices, edging yields further down and reducing both the opportunity cost of owning non-yielding gold and also the funding cost of betting that gold or silver prices will rise in future.

    Who knows when the next banking crisis will explode. With $trillions being gambled each day on derivatives by banks that are too big to fail, it could be tomorrow.

  8. Bloke
    April 15, 2023

    In answer to the headline question:
    Its location is RIGHT near the Bank tube.
    The building itself is RIGHT on a Roman mosaic floor.
    Security of the building is RIGHT.
    Communication access is RIGHT.
    The currency has been about RIGHT much of the time.
    Maybe the idiots running it are WRONG.

  9. Jude
    April 15, 2023

    The only way is to make those who are responsible for managing the BOE. Personally responsible for the outcomes of their decisions. Stop annual bonuses etc… When targets are hit or improved only then are they rewarded. That is the only way to focus their minds! Current situation is they are rewarded for creating high or low inflation. The only loses are the British people!

  10. Wombat
    April 15, 2023

    The Buck has to stop with the person in charge. Perhaps he was never fit for purpose.

  11. agricola
    April 15, 2023

    Do they have a remit to report on the economy as they see it, or to make predictions from a set of facts they have before them. Apart from engineering inflation to 2% or less do they have an agenda with inputs from such as the IMF, other central banks including the ECB. Are they a player in the Globalist game plan.
    Politically what should be made clear to them is that their prime task is to service the UK economy irrespective of any fads that may be the in talk within the blob. It is pertinent to point out that this is also the duty of the Chancellor. Paying lip service to global base lines for Corporation Tax is being a bit player in someone elses game whose targets could be very different from UK Ltd. If there is a need for a re-set you will not get it under our illigitimate caretaker government, at best it comes after the next general election.

    1. agricola
      April 15, 2023

      Can we get away now from this obsession with banks. There are myriad areas of failure in the UK that need comment and solution.

  12. Richard1
    April 15, 2023

    Indeed there seems to be a long history of failure at the Bank of England. It seems all economists selected for the MPC must support the same sort of broadly centre-left groupthink, with the latest being no exception. The likes of Patrick Minford, Liam halligan or Allister Heath are not invited.

    But let’s not forget the steady stream of leftist nonsense to come direct from the Tory benches. The latest is second home owners must now get permission from some local bureaucrat to let out their homes. That’s it – a Tory govt thinks someone should get permission from a little bossy-boots before they agree to rent their own house to someone else who wants it. It is reported that Theresa Villiers is the promoter of this. mrs Villiers was one of those who supported Brexit so we could be free of economically stifling and petty-fogging regulation. But now we find her promoting exactly such drivel herself. Conservative constituency associations need to start chucking out Tory MPs who show themselves in reality to be statists. Mrs Villiers would be a good start.

  13. George Brooks.
    April 15, 2023

    Sounds to me that she might just be a voice in the wilderness unless someone like Rishi takes Mr Bailey to one side and tells him to listen and take advice

  14. Original Richard
    April 15, 2023

    “The Bank has a long history of getting it wrong.”

    Isn’t it more likely that the Bank has wanted to create crises to further their own objectives?

    “Never let a good crisis go to waste”, we were always told, and now the mantra is that we must sign up to international UN treaties to “protect ourselves against future crises”.

    If we do sign up to any such international treaty, such as the latest proposed for another pandemic, you can be sure such a crisis will quickly emerge so that the UN’s overarching powers can be wielded.

  15. Jim2
    April 15, 2023

    Betteridge says no. Blaming the BoE is blaming the wrong dog. The BoE merely shuffles the numbers and taxes around as the world’s business cycle moves. The BoE has a very limited number of cards to play – Parliament needs to find a few more.

    The real problem is the UK has not found a suitable national job since de-industrialisation back in Thatcher’s day. She was useful for about 2 years but then wasted her/our legacy. Subsequent governments of both stripes have similarly failed.

    The real problem is to find a line of work that pays high wages and makes big money – on a national scale. We have not managed that trick. Now perhaps if every child lived on a leafy street, went to a nice prepper then to an Eton lookalike and to an Oxbridge lookalike all would be well. We could have millions of fund managers and wealth managers to serve the world. And influencers and make-up models and psychiatrists and psychologists and flim flam merchants.

    Maybe, better to look around and take a leaf out of the book of successful countries. Make superb semiconductor manufacturing machinery and software. Stop being fussy about who we deal with and recognise that the Americans are not always our friends. They are trying to seize most of the good valid next gen technologies for themselves – knowing that there are now very very few good opportunities around and they intend to have most of them – leaving us out in the cold unless we buy their gas.

    The world is facing a shortage of really good things to make. EV cars are very limited, heat pumps, and grid scale storage – very difficult to make work at any sane cost. The world is up against the iron laws of Nature and no sign that ChatGPT knows the answer.

    Instead the Tories have reduced education spending in real terms. Wherever you look cut backs and lack of places – except for meeja studies. You don’t make money if you don’t invest and you surely head for trouble if you don’t mend the roof while the sun shines.

  16. Ian B
    April 15, 2023

    Sir John

    The BoE under this regime just as with the OBR has never got it right. More the other way they have maliciously sort to create damage to the UK – why would that be?

    Then we get to read in the Telegraph how Countries have signed up to the OECD minimum tax directive.

    Why do we need a Government? If all the time they hand over the Governing of the UK to those signed up-to the Socialist WEF etc. What this Conservative Government is saying is democracy is not part of their brief, managing is not what they agreed to. They are also saying we(as in the Government) are wrong it is not our place to put the UK before our overlords elsewhere. The have half swapped the EU Commission for another unelected unaccountable body outside UK Jurisdiction. In other words a shrug of the shoulders, you the people didn’t honestly believe you could elect a Conservative Government that would put the interest of the electorate before personal ego and self gratification.

  17. glen cullen
    April 15, 2023

    Its quite telling that no one in the cabinet is disturbed by her appointment

  18. Bert Young
    April 15, 2023

    The answer is “No”.

  19. a-tracy
    April 15, 2023

    Try asking for a meeting with several of your likeminded colleagues to see if you will entertain you.

    1. a-tracy
      April 15, 2023

      Sorry, to see if Megan Greene will entertain you.

  20. heavensent
    April 15, 2023

    Don’t know why we are expected to comment on this as if anything we say will make a blind bit of difference.

  21. XY
    April 15, 2023

    A strangely positive spin on this Hunt-appointed lefty economist.

    Guido’s take on her a couple of days ago was more interesting – unearthing her tweets showing a rabid remoaner with little understanding.

    I don’t see this as the wonderful appointment that this piece would suggest.

    Reply I did not praise her or the appointment!

  22. Berkshire Alan
    April 15, 2023

    I think it depends on who they need to get it right for.
    So far it would appear to be absolutely no one but themselves, as they are all still in a job having failed to get anything right for anyone else recently.

  23. Pauline Baxter
    April 15, 2023

    You are probably right Sir John.
    Oddly enough though, at 78yrs of age and no income but the basic State Pension this voter is far more interested in the huge rise of the cost of energy!

  24. Mike Wilson
    April 15, 2023

    It has specialised in boom/bust policies all my adult life.

    Let’s be fair – your party has specialised in boom/bust policies all my adult life. This blaming everyone else is wearing very thin. Take responsibility. You can’t run the economy so you allow and encourage debt fuelled booms in a desperate attempt to create growth to keep the massive government debt plates spinning. One of these days the plates are going to fall and we’ll have a real debt and banking crisis.

  25. glen cullen
    April 15, 2023

    I note that Hunt is declaring that he’s got it right and that the country is back in the black due to his stewardship and welcomed by the IMF …praise be the lord. – BBC red button

  26. Original Richard
    April 15, 2023

    To quote Net Zero Watch :

    “Its [the BoE’s] obsession with climate change, promoted and pushed through by its former governor, Mark Carney, in tandem with government ministers, has for years distracted it from its main responsibilities. Instead, it has been enforcing ESG disclosure guidelines, carbon-testing balance sheets and promoting Net Zero policies.”

    1. glen cullen
      April 15, 2023

      Nothing to do with commerce or economic growth but more to do with politics and wokeness …the BoE and this government have both lost there way

Comments are closed.