Bank of England’s Bailey says it’s not his job to steer markets on interest rates

“Forward misguidance”, was how Rabobank described the BOE’s messaging after the decision, and Bob Stoutjesdik, a fund manager at Robeco Institutional Asset Management in Rotterdam, said Bailey “has a serious credibility problem”.

“When look you look at how markets respond today and how they have responded to the hawkish messages you can easily conclude that the BOE have seriously lost credibility, which I think is difficult to repair,” he said.

Bailey’s apparent U-turn invited comparisons with an “unreliable boyfriend”, a tag first applied to former governor Mark Carney after he signalled rate rises and changed his mind later. “It’s not compulsory for a BOE governor to be an unreliable boyfriend,” Bailey said.

He told Bloomberg TV that his pre-meeting comments were prompted by concern that falling bond yields could lead to a rise in inflationary pressures. He said the bets after his remarks were “in the right direction, overdone”.

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