Beyond the Mandate: Calls Grow for Central Banks to Refocus on Inflation Fight
LONDON — With Bank of England Governor Andrew Bailey's term set to end in 2028, a transatlantic argument over the very purpose of central banking is shaping the succession conversation. Some policymakers are pointing to former U.S. President Donald Trump's 2017 nomination of Kevin Warsh to the Federal Reserve chair as a provocative template—one that prioritizes monetary hawkishness and a narrow mandate above all else.
Warsh, a Fed governor during the 2008 financial crisis, has been a vocal critic of quantitative easing (QE) and what he sees as mission creep at the world's leading central banks. His critique, analysts note, translates directly to Threadneedle Street. "The Fed has acted more as a general-purpose agency of government than a narrow central bank," Warsh famously argued—a sentiment echoing in UK circles as the BoE's balance sheet unwinds at a projected cost of tens of billions to taxpayers, with disputed benefits for long-term growth.
The core charge is that the Bank of England, like its peers, has diluted its focus. Its primary mandate of inflation targeting has been crowded out, critics say, by secondary objectives: supporting growth and employment, facilitating the net-zero transition, and overseeing prudential regulation. This diffusion of effort, the argument goes, carries a price. The BoE's delayed response to post-pandemic inflation damaged its credibility, potentially condemning the UK to a longer period of elevated interest rates as it struggles to restore trust.
"The best way to keep interest rates low is through a credible, unwavering commitment to fighting inflation," said a senior City analyst who requested anonymity. "A perceived shift towards a Warsh-like hawkishness could paradoxically anchor expectations and allow for a looser policy stance over time." The track records of both Bailey and his predecessor, Mark Carney, are now being scrutinized through this lens, with calls for a strategic pivot growing louder.
Voices from the Forum:
"Finally, someone is talking sense. The BoE became a glorified social agency. Its failure on inflation is a direct result of taking its eye off the ball. 2028 can't come soon enough for a hard reset." — Martin Croft, retired investment banker, London.
"This is a dangerous oversimplification. Modern economies face complex, interconnected challenges. A central bank that ignores financial stability or climate risk is failing in its duty. The Warsh model is a retreat to a failed, narrow orthodoxy." — Dr. Priya Sharma, economist, University of Edinburgh.
"It's rich to cite Trump's Fed pick as an example of anything but political maneuvering. This isn't about policy purity; it's about finding cover for austerity. The 'core mission' rhetoric will be used to justify neglecting real economic pain." — Jake Pearson, trade union policy officer, Manchester (sharper, more emotional critique).
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