No one can deny that Andrew Bailey had a difficult first week as governor of the Bank of England. Appointed in December 2019, he took charge on March 16 the following year to be faced immediately with the explosion of coronavirus cases, a sterling crisis and the UK government moving towards lockdown.
Taking dramatic action to quell the immediate difficulties, Bailey earned praise for steering the economy successfully through the darkest early days of Covid-19, while remaining resolute and calm. Almost two-and-a-half years on, the plaudits have turned to brickbats and the governor is taking flak for the perilous state of the UK economy.
In the past 10 days, inflation has moved into double digit territory for the first time in 40 years, hitting 10.1 per cent in July, five times the BoE’s 2 per cent target for inflation. Rapid price rises are coming at a time when the UK economy has started to contract with the central bank expecting a full-blown recession to start in the autumn and last for more than a year. Real wages fell at their sharpest rate on record in the second quarter of 2022 and consumer confidence is at its lowest level in almost 50 years.