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Andrew Bailey has plenty to get off his chest, though he’s not quite reached the point where he screams: “I’m as mad as hell and I’m not going to take this anymore!” By nature, central bankers are reserved characters, and the governor of the Bank of England is no exception. But after a welter of criticism of the Bank’s performance and whispers about whether he is up to the job, Bailey feels it is time to set the record straight.
We are sitting in the governor’s office overlooking what passes as his private garden inside the Bank of England, a walled courtyard lined with trees and immaculately trimmed hedges. Overhead, passing aircraft make outside meetings unworkable. Underneath lie the Bank’s vaults holding a total of around 400,000 bars of gold bullion, a detail that Bailey later casually drops into the conversation.
This often-forgotten fact serves as a reminder that the Bank of England’s role goes beyond setting interest rates affecting millions of UK mortgage-holders. As the world’s second-largest custodian of gold reserves, the Bank supports other central banks’ access to liquidity. Forget Little England—the Bank, founded in 1694, has stood for centuries as a guardian of global financial stability.
Bailey began his eight-year term as governor in March 2020 in the most challenging circumstances. On his first day in office, Matt Hancock told the House of Commons that all unnecessary social contact should cease in response to the Covid-19 pandemic. On his third day, the pound slumped against the dollar, triggering a crisis in financial markets. On his fourth day, he chaired an emergency meeting of the Monetary Policy Committee, tasked with setting interest rates. The world economy had juddered to a halt, raising fears of a depression. Then, just as the global economy was recovering, Russia invaded Ukraine. The energy price shock triggered double-digit inflation after a four-decade hiatus, with the Bank accused of being asleep at the wheel.
“Well, I do wonder about my sense of timing,” says Bailey, a little ruefully, but “you have to be prepared to deal with what comes your way. You can’t say, well, let me pick and choose the conditions.”
Bailey, 64, is a Bank of England lifer. Bespectacled and stocky, he comes across at times more like the local bank manager than the Bank governor. While he possesses a first-class intellect—his history doctorate at Cambridge discussed the impact of the Napoleonic Wars on the Lancashire cotton industry—he wears it lightly...
The grammar school boy from Leicester (Wyggeston Boys School) is determined to introduce a less formal, more open culture at the Bank. Wary of hierarchy, conscious that deference has long since fled the UK, he has chosen to play the role of “The People’s Governor” (my label, not his)....