Andrew Bailey on monetary policy framework
From WATCH HEARING NOW: Bank of England Governor Bailey Faces House of Lords Economic Committee | AC14 · · DWS News
“I think it is important to have that flexibility. Now, it's quite interesting. I I made some remarks on this in an speech in Reykjavik last Friday. There are sort of two oversimplifying a bit. There are two forms of remit that exist in in that in this world. One is what tends to call we call the dual mandate, the sort of thing the Federal Reserve has where there's a there's an there's a price stability part to it and there's an employment part to it and they sit on the same level. They're not weighted explicitly. That's that's a matter of judgment. And we of course only have the former at the prior the sort of the top level. But then as as you rightly say, we have this language about so what we tend to call the trade-off language, which is as you said the speed at which we can bring inflation back to target when we face the sort of situation we face today. I I think maybe because I'm more used to it, but I think our version has merits. Um I think it it isn't it isn't of course completely prescriptive. It leaves judgment, but I think it it creates more of a framework for the decision-making than the dual mandate structure, which I just do think leaves it very open what the what the weights are on those two things.”
On , Andrew Bailey, Governor at Bank of England, spoke about monetary policy framework during WATCH HEARING NOW: Bank of England Governor Bailey Faces House of Lords Economic Committee | AC14 on DWS News.
About Andrew Bailey
Andrew Bailey, Governor of the Bank of England, appeared before parliamentary committees and spoke at conferences in recent months, addressing the UK economy, monetary policy, and financial stability. In April 2026, the Monetary Policy Committee held interest rates at 3.75%, a decision Bailey described as an "active hold" rather than a passive wait-and-see approach, given significant uncertainty. He stated that the path of the energy price shock, driven by the conflict in the Middle East, was "very uncertain" and that a prolonged spike could lead to higher rates, while a prompt end to the conflict could lead to a more benign scenario. Bailey also noted that the MPC had "in effect tightened policy" and that there was "a bit of time" before acting on second-round effects. Bailey discussed a range of other topics, including artificial intelligence, private credit, and trade. He said that UK banks did not yet have access to the AI model Mythos, but expressed optimism they would soon have access to other models. On private credit, he described it as "playing an important role" and "a good thing," but cautioned that it is "connected into the broader system" and that regulators need to understand those interconnections. He also stated that "tariffs are not the answer" to the scarring effects of China's entry into the world trading system, and that preserving a freer trade system is "very important." Bailey emphasized the importance of central bank independence, saying it is "very important" because central banks must take decisions over a longer time frame than electoral cycles.