Arab Press

بالشعب و للشعب
Monday, Feb 02, 2026

Look past the headlines and Bank of England's governor seems ready to flex his eyebrows

Look past the headlines and Bank of England's governor seems ready to flex his eyebrows

The Bank of England has announced that it's leaving interest rates and its quantitative easing programme unchanged. In practical terms, the Bank has done nothing to counter inflation. But that could soon change, says Ed Conway.

Once upon a time, which is to say about a century ago, central bankers did not communicate in the way normal people do.

Rather than telling the world what they were about to do, they used their eyebrows instead.

If the governor raised his eyebrows (it has always been a he, so far), that was a clear sign to markets and investors that something important was coming - a change in interest rates or financial regulation or something similar.

Now we're in the era of 24-hour TV news and social media, you might have thought that the eyebrows would no longer be necessary, but there's reason to believe the current governor - Andrew Bailey - is getting ready to flex them.

BoE governor Andrew Bailey


Today the Bank of England announced that it was leaving interest rates where they are at 0.1%, and would leave its quantitative easing (QE) programme, whereby it is creating money to buy government bonds, unchanged.

There were two members of the nine-person monetary policy committee voting to trim QE, but in practical terms, the Bank did nothing. No surprises.

Yet read deeper into the reams of documents the Bank released today, and you get the sense of an eyebrow moving somewhat - quivering if not rising. The key fact in the backdrop to this is that inflation - as measured by the consumer price index - is now comfortably above the Bank's 2% target.

Indeed, it's so far above target that the governor had to write a letter of explanation to the chancellor.

In that letter the governor trotted out the Bank's familiar position: yes inflation is high, yes this is higher than we expected, but even so, we expect it to fall back in due course. This will, so he wrote, be "transitory".

But while such pronouncements seemed confident earlier this year, they are becoming slightly less convincing as prices rise higher and higher. For one thing, the Bank now thinks that not only will CPI inflation rise above 4%, but it will also be there until the middle of next year. That's nearly a whole year of inflation at double the Bank's target.

For another, the Bank conceded that energy prices could well push that up even further. Finally, within the minutes, the Bank signalled that interest rates may soon go up. Developments, it said, "appear to have strengthened that case".

In the wake of these minutes, the traders betting on future changes in interest rates seemed to take this as a signal.

A small increase (0.15 percentage points) is now nearly a 90% probability next February, according to these markets. The eyebrows, in other words, seem to be signalling something.

Comments

Oh ya 4 year ago
Central banks can not raise interest rates to slow inflation. Countries are so far in debt they are borrowing money now to make ends meet. They would be bankrupt in a month if the rate goes up.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Germany and Saudi Arabia Move to Deepen Energy Cooperation Amid Global Transition
Saudi Aviation Records Historic Passenger Traffic in 2025 and Sets Sights on Further Growth in 2026
Tech Market Shifts and AI Investment Surge Drive Global Innovation and Layoffs
Global Shifts in War, Trade, Energy and Security Mark Major International Developments
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
The AI Hiring Doom Loop — Algorithmic Recruiting Filters Out Top Talent and Rewards Average or Fake Candidates
Federal Reserve Holds Interest Rate at 3.75% as Powell Faces DOJ Criminal Investigation During 2026 Decision
Putin’s Four-Year Ukraine Invasion Cost: Russia’s Mass Casualty Attrition and the Donbas Security-Guarantee Tradeoff
Saudi Crown Prince Tells Iranian President: Kingdom Will Not Host Attacks Against Iran
U.S. Central Command Announces Regional Air Exercise as Iran Unveils Drone Carrier Footage
Trump Defends Saudi Crown Prince in Heated Exchange After Reporter Questions Khashoggi Murder and 9/11 Links
Saudi Stocks Rally as Kingdom Prepares to Fully Open Capital Market to Global Investors
Air France and KLM Suspend Multiple Middle East Routes as Regional Tensions Disrupt Aviation
Saudi Arabia scales back Neom as The Line is redesigned and Trojena downsized
Saudi Industrial Group Completes One Point Three Billion Dollar Acquisition of South Africa’s Barloworld
Saudi-Backed LIV Golf Confirms Return to Trump National Bedminster for 2026 Season
Gold Jumps More Than 8% in a Week as the Dollar Slides Amid Greenland Tariff Dispute
Boston Dynamics Atlas humanoid robot and LG CLOiD home robot: the platform lock-in fight to control Physical AI
United States under President Donald Trump completes withdrawal from the World Health Organization: health sovereignty versus global outbreak early-warning access
Trump Administration’s Iran Military Buildup and Sanctions Campaign Puts Deterrence Credibility on the Line
Tech Brief: AI Compute, Chips, and Platform Power Moves Driving Today’s Market Narrative
NATO’s Stress Test Under Trump: Alliance Credibility, Burden-Sharing, and the Fight Over Strategic Territory
Saudi Arabia’s Careful Balancing Act in Relations with Israel Amid Regional and Domestic Pressures
Greenland, Gaza, and Global Leverage: Today’s 10 Power Stories Shaping Markets and Security
America’s Venezuela Oil Grip Meets China’s Demand: Market Power, Legal Shockwaves, and the New Rules of Energy Leverage
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Prince William to Make Official Visit to Saudi Arabia in February
Saudi Arabia Advances Ambitious Artificial River Mega-Project to Transform Water Security
Saudi Crown Prince and Syrian President Discuss Stabilisation, Reconstruction and Regional Ties in Riyadh Talks
Mohammed bin Salman Confronts the ‘Iranian Moment’ as Saudi Leadership Faces Regional Test
Cybercrime, Inc.: When Crime Becomes an Economy. How the World Accidentally Built a Twenty-Trillion-Dollar Criminal Economy
Strategic Restraint, Credible Force, and the Discipline of Power
Donald Trump Organization Unveils Championship Golf Course and Luxury Resort Project in Saudi Arabia
Inside Diriyah: Saudi Arabia’s $63.2 Billion Vision to Transform Its Historic Heart into a Global Tourism Powerhouse
Trump Designates Saudi Arabia a Major Non-NATO Ally, Elevating US–Riyadh Defense Partnership
Trump Organization Deepens Saudi Property Focus with $10 Billion Luxury Developments
There is no sovereign immunity for poisoning millions with drugs.
Mohammed bin Salman’s Global Standing: Strategic Partner in Transition Amid Debate Over His Role
Saudi Arabia Opens Property Market to Foreign Buyers in Landmark Reform
The U.S. State Department’s account in Persian: “President Trump is a man of action. If you didn’t know it until now, now you do—do not play games with President Trump.”
CNN’s Ranking of Israel’s Women’s Rights Sparks Debate After Misleading Global Index Comparison
Saudi Arabia’s Shifting Regional Alignment Raises Strategic Concerns in Jerusalem
OPEC+ Holds Oil Output Steady Amid Member Tensions and Market Oversupply
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
President Trump Says United States Will Administer Venezuela Until a Secure Leadership Transition
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Saudi-UAE Rift Adds Complexity to Middle East Diplomacy as Trump Signals Firm Leadership
×