{"id":81873,"date":"2025-04-24T07:59:18","date_gmt":"2025-04-24T06:59:18","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=81873"},"modified":"2025-04-24T07:59:18","modified_gmt":"2025-04-24T06:59:18","slug":"at-a-time-when-big-thinking-is-required-we-have-the-winnie-the-pooh-of-central-banking-in-charge-of-monetary-policy","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/04\/24\/at-a-time-when-big-thinking-is-required-we-have-the-winnie-the-pooh-of-central-banking-in-charge-of-monetary-policy\/","title":{"rendered":"At a time when big thinking is required, we have the Winnie the Pooh of central banking in charge of monetary policy"},"content":{"rendered":"<p>As <a href=\"https:\/\/www.theguardian.com\/business\/live\/2025\/apr\/24\/us-trade-war-uk-growth-bank-of-england-governor-tesla-sales-business-live-news?filterKeyEvents=false&amp;page=with%3Ablock-6809c6b68f08082b6071ca18#block-6809c6b68f08082b6071ca18\" target=\"_blank\" rel=\"noopener\">The Guardian<\/a> notes this morning:<\/p>\n<blockquote>\n<p class=\"dcr-16w5gq9\">Fears are mounting that Donald Trump\u2019s trade war will hurt the UK economy, even as the US president backtracks over some of his tougher measures.<\/p>\n<p class=\"dcr-16w5gq9\">Even though Britain is getting off relatively lightly with a 10% tariff, new trade disruption is likely to damage economic growth.<\/p>\n<p class=\"dcr-16w5gq9\">Andrew\u00a0Bailey, the governor of the Bank of England, sounded the alarm in Washington last night, where the International Monetary Fund\u2019s Spring Meeting is taking place.<\/p>\n<\/blockquote>\n<p>Three thoughts.<\/p>\n<p>First, he was paid a great deal to make that statement of the bleedin' obvious.<\/p>\n<p>Second, that he needed to say it suggested that he had previously thought otherwise: this reality has only just dawned on him.<\/p>\n<p>Third, he is right. You only had to read what I have been saying here for a while to know that.<\/p>\n<p>But, as ever with Bailey, he left the obvious question hanging. What are the consequences of this?<\/p>\n<p>He hinted that one might be a cut in interest rates. Hallelujah! At last! But before I get too excited, I suspect that he means by a quarter of a per cent.<\/p>\n<p>And after that? Who knows: Asking Bailey to think beyond the details of the time and location of his next dinner with the great and powerful is a bit much to expect; beyond his pay grade, he might say.<\/p>\n<p>So let me spell it out. What we need is a fundamental rethink of the way in which the economy is managed:<\/p>\n<ul>\n<li>For whom<\/li>\n<li>With what goals<\/li>\n<li>And with what governance structures<\/li>\n<li>Based on what economic understanding<\/li>\n<li>To reflect which power relationships that are of importance in society, and, as significantly, how their corrosive impacts might be addressed<\/li>\n<\/ul>\n<p>But that is too much for Bailey to think about.<\/p>\n<p>He can only manage one task at a time. Inflation is his only goal. Interest rates are the only tool. Anything more than that really is too taxing for him (because he can't do fiscal policy).<\/p>\n<p>And the chance that the status quo might need to be challenged really is beyond his comprehension.<\/p>\n<p>At a time when big thinking is required, we have Andrew Bailey at the Bank of England: the Winnie the Pooh of central banking, surrounded by Piglets. Such is our fate.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As The Guardian notes this morning: Fears are mounting that Donald Trump\u2019s trade war will hurt the UK economy, even as the US president backtracks<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/04\/24\/at-a-time-when-big-thinking-is-required-we-have-the-winnie-the-pooh-of-central-banking-in-charge-of-monetary-policy\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[70,136,204,35,16,106],"tags":[],"class_list":["post-81873","post","type-post","status-publish","format-standard","hentry","category-banking","category-city-of-london","category-economic-justice","category-economics","category-ethics","category-politics"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/81873","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=81873"}],"version-history":[{"count":1,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/81873\/revisions"}],"predecessor-version":[{"id":81874,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/81873\/revisions\/81874"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=81873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=81873"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=81873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}