Bank of England Signals Active Rate Hold as Oil Volatility Complicates 2% Inflation Fight
Updated
Updated · Bloomberg · Jun 19
Bank of England Signals Active Rate Hold as Oil Volatility Complicates 2% Inflation Fight
2 articles · Updated · Bloomberg · Jun 19
Summary
Andrew Bailey is framing the Bank of England’s stance as an “active” rate hold — keeping rates unchanged while signaling enough resolve to tighten financial conditions through markets.
That approach aims to curb inflation without inflicting fresh damage on growth and jobs, a balance the BOE sees as harder amid renewed volatility in oil markets.
Bailey’s description revives the BOE’s old “Maradona theory of interest rates,” a tactic former governor Mervyn King likened to the 1986 World Cup goal in which Diego Maradona dummied past England.
The message is that communication itself can do part of the tightening work, letting the BOE stay tough on inflation even without another immediate rate increase.