The Bank of England’s place could soon be up for grabs
A Trumpian grab on the powers of the Bank of England should leave us all considering its role in the UK’s economic woes.
The Bank of England is due to announce its latest rate decision on 5 February. Alongside that I noted it is celebrating 80 years since it was nationalised on none other than Valentine’s Day (14 February).
Yes that’s right, the Bank of England was a private institution (incorporated in 1694) for longer than a public one. Clement Attlee nationalised it in 1946.
It is therefore apposite to consider the bank’s role in the evolving crisis of the UK’s economic misfortune and why Nigel Farage’s Reform Party is now openly testing its role as an independent rate setter.
Farage has been criticizing the Bank of England for some time. Although he’s not alone in this, events across the Atlantic ever tend to colour the direction of travel in Britain.
Trump has barracked Fed Chair Jerome Powell for some time for his failure to lower rates, which is certainly odd given he appointed the guy.
Now Farage has said he’ll replace Andrew Bailey with a ‘Brexiteer’ – so far so Trumpian.
Weirdly though, Trump’s pick to replace Powell (who was due to step down anyway) is Kevin Warsh. The market reacted to this announcement in a way that suggests Warsh is a massive rate hawk. Precisely not the sort of candidate that Trump seemed to want.
The criticisms of the Bank of England mirror those of the Fed to an extent. It’s too big (in terms of staff), it’s too aggressively pursuing quantitative tightening (QT) and it pays banks far too much in interest on bank reserves.
Farage has stopped short of calling for the end to rate setting independence, but some parts of the discussion of the political economy do now go as far as suggesting that independence was a mistake.
This thinking feeds more broadly into much of the theorising of the British radical right – which at its core aims to roll back what it sees as the expansion of the ‘Blairite state’.
Bailey’s role is up for renewal in March 2028. Assuming the Labour Government doesn’t collapse in on itself (not necessarily a given as current events move quickly and badly), then they will pick the next Governor. Farage will have to depose that Governor if he doesn’t like them.
Whether that comes to pass remains to be seen. But clearly the conversation over the role of the Old Lady of Threadneedle Street, as a powerful institution at the heart of the UK economy, is now firmly up for grabs.
Month ahead, February 2026
The Bank of England’s rate decision is on 5 February, the same day as the ECB’s latest rate announcement.
On 12 February we’ll get the ONS monthly GDP, including the first estimate of quarterly GDP for Q4 2026.n
14 February is Valetine’s Day and the 80th anniversary of the Bank of England’s nationalisation.
The latest ONS Labour Market Overview for February 2026 is published on 17 February while the ONS UK monthly inflation figures land on 18 February.
20 February is when the ONS UK monthly retail sales figures are released, the same day that the U.S. publishes its first set of GDP data for fourth quarter of 2025.
All the best hoping for an early Spring from all of us here at MRM, Octo Members and Mouthy Money.