28 April 2022 - Can the Bank of England remain independent?

The Bank of England’s Monetary policy committee is facing one of the most crucial meetings of its twenty-five-year history when it meets next week. Accused of being too sanguine about rising inflation last summer when it was still working to protect the economy from the effect of the pandemic on monetary policy, the Central Bank is now stuck between a rock and a hard place. Its current rate hike cycle, which is expected to see interest rates rise to 1% for the first time since February 2009 while not considered to be wrong given rising inflation, which could reach 10%, but may not be fit for purpose. The Chancellor of the Exchequer, Rishi Sunak, is sure to be in contact with the Bank’s Governor Andrew Bailey, which may lead to questions about the Bank’s independence. In Parliament, where there is a culture of blame, there has been very little discussion of the role of the Central Bank in the current issues the economy faces. The evidence still points to inflation continuing to rise, whale talk of a recession is still a little anecdotal. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.