U.K. Business Executives, Economists, Politicians React to New BoE Boss Bailey

December 20, 2019

Britain’s new government named Andrew Bailey as the next Bank of England boss on Friday.

Following is reaction to his appointment.

LIZ MARTINS, UK ECONOMIST, HSBC

“In terms of Mr Bailey’s position on the dove-hawk spectrum, it is very hard to tell. Mr Bailey does not comment publicly on monetary policy issues, or even more broadly about Brexit and the economy. He has on a couple of occasions alluded to the possibility of deregulation in a post-Brexit Britain, saying he favored a ‘same outcome, lower burden’ approach to financial rules.”

“While we would not necessarily expect Mr Bailey to hand over the responsibility of chairing the press conferences, he could still allow a greater role for his colleagues behind the scenes – meaning the market could end up looking to Mr Broadbent or other MPC members for guidance more than in the past.”

JOHN MCDONNELL, FINANCE CHIEF OF OPPOSITION LABOUR PARTY

“As an establishment figure with what some consider is a less than inspiring record at the FCA, Andrew Bailey will need to demonstrate early that he appreciates the need to address the deep structural problems of our economy and like Mark Carney understands the climate change threat.”

GINA MILLER, SCM DIRECT WEALTH MANAGEMENT AND ANTI-BREXIT CAMPAIGNER

“It’s absolutely scandalous – if you look at his record at the FCA and what has happened under his watch – to have someone like that now in charge of BOE.”

“He intervened after things, if you look at what’s gone on at Woodford. If you look at all the things on his watch, the culture has been to do things at the very last minute.”

“It was reactionary. That is a very odd culture.”

CHRIS GRAHAM, SENIOR EUROPE ECONOMIST, STANDARD CHARTERED

“We don’t know where he will come down on in terms of monetary policy but my hunch is he will be a pragmatist.”

“I’d expect him to be pragmatic and reliant on data. The message we have from the BoE that monetary policy could be adjusted either direction depending on the economy, I don’t expect that to change.”

GEORGE BUCKLEY, ECONOMIST, NOMURA

“It’s a good choice, a steady choice. They could have made a political choice but they did not.”

“It’s nice to see they’ve chosen someone for their capacity to do the job, as opposed to whether they are a supporter or not of the government. This should be an appointment that is above the political fray, and in that sense it is, as they have chosen someone who has the qualifications for it.”

“It also makes sense to choose someone who’s been at the bank for a very long time, and understands how the bank works from a number of angles.”

PAUL DALES, UK ECONOMIST, CAPITAL ECONOMICS

“It is very rare for new governors to come in and change the dial on monetary policy on day one. So Bailey’s appointment doesn’t change our forecasts in any way. Instead, governors usually make their mark (good or bad) during crises.”

“Perhaps the biggest challenge will be dealing with the next severe downturn, which will probably take place during his eight-year term. That may require some innovative thinking given that the Bank is unlikely to enter it with much interest rate ammunition and as the current arsenal of unconventional policies are not considered very effective.”

DEREK HALPENNY, HEAD OF RESEARCH, MUFG

“It’s worth noting that a strong favorite for the role, LSE director Minouche Shafik, was rejected partly on the basis of her opposition to Brexit according to a report in the FT. On the other hand PM Boris Johnson’s economic adviser when he was London mayor, Gerard Lyons, who has strong pro-Brexit views, was also not selected for the post. This could suggest that Andrew Bailey may have a somewhat more moderate view on the issue.”

“If this is the case, and he is less concerned about the adverse economic impact of Brexit, it makes the case that he may be less inclined to cut interest rates than markets are currently pricing.”

SILVIA DALL’ANGELO, SENIOR ECONOMIST, HERMES INVESTMENT MANAGEMENT

“His appointment is a positive for financial markets, as it provides some certainty at an otherwise uncertain time. However, looking ahead, he faces a tough job as he is expected to take swift action to smooth out the likely bumps of the Brexit process the country is going though.”

PAUL EVANS, DIRECTOR-GENERAL, ASSOCIATION OF BRITISH INSURERS

“This is an excellent appointment which the insurance and long-term savings sector will wholeheartedly support.”

SIMON MORRIS, PARTNER, CMS LAW FIRM

“The market is sure to welcome a real pragmatist who has run both the prudential and the conduct regulators. His views on maintaining open financial markets in the aftermath of Brexit will chime with the City at a time of major disruption.”

(Reporting by David Milliken and Sujata Rao-Coverley)

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