The Bank of England appears to be as confused as everybody when it comes to the outlook for interest rates. At the beginning of the month, a speech by the Bank’s Governor Andrew Bailey triggered hugely conflicting headlines. They ranged from “Bailey downplays talk of sharp rise in interest rates” to “interest rates may need to go higher” and through to “interest rates may have peaked”.
Meanwhile, members of the Bank’s rate-setting Monetary Policy Committee (MPC) like Catherine Mann and Swati Dhingra have adopted rather different views. I applaud the differences of opinion now emerging on the MPC. For too long it was open to accusations of groupthink. At least there is now evidence of genuine debate, even if Bailey’s own speech appears to offer a little too much by way of ambiguity.
