Another Andrew Bailey misstep was the last thing markets needed

Andrew Bailey’s tenure as Bank of England governor has not been a happy one. Marked first by the pandemic, it has been defined by rising prices, an economic slowdown and now a crisis of sorts in financial markets. Amidst all of this, the one thing the City would look for would be reliable and consistent decision-making and messaging. It has had precious little of either in either the last few days or, frankly, since he took the top job. 

The last example of this, of course, was Tuesday evening’s remarks – or threats – regarding pension funds.

Quite why the Governor felt the moment to clarify whether or not the Bank’s vital bond-buying intervention would be extended was in a chatty little sitdown in Washington DC at 8pm UK time is beyond us.

The Bank has every form of communication at its arsenal – why in the world would it not simply publish a statement? Instead we got folksy Andy B, jawing away with his pals from global finance, sending the British public into a (mercifully overwrought) tizz about their pensions.

There will be some who think this criticism unfair – that Bailey simply confirmed a pre-existing policy in a colourful fashion – but it ignores the role of the Governor to assess the mood music of the City and act accordingly. On Tuesday, the notes being played the loudest were for an extension thanks to the continued volatility on the bond market, a tune rather dramatically stopped in its tracks late into the evening. Of course, that was swiftly followed by a report in a fellow paper that Bank officials were saying something different in private. Clear? As mud. Yields have responded appropriately.

When Andrew Bailey got the job, he was regarded as a safe pair of hands – though those caught up in the minibond scandal or the Woodford collapse, both of which occurred under his watch at the FCA, might scoff at that description.

He is now seen as such a liability that one wag said yesterday every time his mouth opens, the pound falls. Both Bailey and the government could do with some work on their communication.