Bank of England's Bailey says credible budget policy is needed more than ever
Bailey said governments must make fiscal plans credible as investors push 10-year gilt yields to their highest level since 2007.
- On Thursday, Bank of England Governor Andrew Bailey warned in Istanbul that fiscal policy "must be credible and directed at stability" to manage negative shocks like the Iran war.
- British government bond yields surged to their highest in decades on Thursday, triggered by a global selloff amid rising oil prices and geopolitical tensions.
- The 10-year gilt yield rose to about 5.53% on Thursday, the highest level since 2007. Analysts estimate the Chancellor's fiscal headroom narrowed from £23.6 billion to £11.3 billion.
- Chancellor John Healey must finalize his Budget later this month amid fiscal constraints. Bailey warned that calls for increased spending grow louder when borrowing costs rise and growth weakens.
- Bailey argued that maintaining strict fiscal rules is essential to curb investor demands for higher returns. Central banks must remain focused on bringing down inflation while governments repair public finances.
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20 Articles
John Healey receives 'Liz Truss warning' from Bank of England chief ahead of first Budget
The Governor of the Bank of England has issued a "Liz Truss" warning to Chancellor John Healey ahead of his first Budget. With just under three weeks to go until Mr Healey delivers his first budget, Andrew Bailey has warned that further damage to Britain’s credibility from rising spending could trigger a repeat of the 2022 crisis.In an address to fellow central bankers on Thursday, Mr Bailey did not directly mention the Budget but warned of a fr…
Bank of England's Bailey says credible budget policy is needed more than ever
Governments need to redouble efforts to restore confidence in their public finances, Bank of England Governor Andrew Bailey said on Thursday, as global bond markets come under pressure from high borrowing and rising inflation linked to the Iran war.
Bailey: Governments must too help control inflation
Bank of England governor Andrew Bailey has said that governments should look to help keep prices stable and win over markets with disinflationary tax and spending measures. In an intervention on the relationship between monetary and fiscal policy, Bailey urged governments to consider the impacts of government spending and borrowing on inflation. The Bank of [...]
The president of the Bank of England (BoE), Andrew Bailey, warned that the ability of governments to respond to a new economic slowdown is limited by weak growth and recent shocks. Amid the falling prices of public bonds (and high in their revenues), which are being pushed by energy costs and tax concerns in France, Bailey stressed the need for reliable fiscal policies for markets. Exclusive material for subscribers. To have full access, access …
Evening Standard
Low growth and successive shocks erode public finances, Bank boss says
Andrew Bailey’s remarks come weeks before the Chancellor lays out his autumn Budget statement.
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