London Daily

Focus on the big picture.
Wednesday, Jul 30, 2025

Bank of England head Andrew Bailey denies role in Liz Truss's downfall

Bank of England head Andrew Bailey denies role in Liz Truss's downfall

Andrew Bailey's comments to Sky News come after the former president of America's Federal Reserve Bank of Minneapolis said the critical decision that sealed Ms Truss's fate was when the UK central bank ended its emergency support for the bond markets last month.
The Bank of England Governor has denied having any part in the downfall of Liz Truss.

In an interview with Sky News, Andrew Bailey said that he "vehemently disagrees" with allegations that the Bank's actions precipitated the departure of the former prime minister.

It followed claims from Narayana Kocherlakota, the former president of America's Federal Reserve Bank of Minneapolis, in a Bloomberg article, that the critical decision that sealed Ms Truss's fate was when the UK central bank ended its emergency support for the bond markets last month.

However, in an interview recorded alongside the publication of its forecasts earlier this month, Mr Bailey told Sky News: "I vehemently disagree with [that analysis]… it is based on a fallacy.

"The argument is that we should have continued our intervention. And that had we done so, the world would have turned out differently. But what that misses is that our intervention, as a central bank, as it should be, was to address a precise financial stability problem, particularly connected to parts of the pensions fund industry.

"I'm afraid had we gone on with that intervention, beyond the point of financial stability being suitably restored, we'd have been creating another problem, which is what economists tend to call a moral hazard problem, ie people would have said: 'well the Bank of England's always going to intervene', and that's wrong. We did the job we set out to do."

Asked whether he bore responsibility for Liz Truss's departure, he said: "No, of course we didn't depose Liz Truss. I would never do anything like that."

Economic fallout

The comments come with the UK economy now officially shrinking, in what many economists - including the Bank of England - believe is the beginning of a potentially protracted recession.

The new chancellor, Jeremy Hunt, is due to unveil a package of spending cuts and tax rises later this week, in what the government is casting as a repair job following the mini-budget.

The governor said that while the interest rates on government bonds had fallen sharply since the period of chaos, among the main victims of the disruption were those who signed up to fixed rate mortgages during that period.

"I have a great deal of sympathy for [those people]… It is very unfortunate what has happened."

Gerard Lyons, an economist who offered some advice to the Truss team, says he warned them about the risk of a market disturbance.

"We said markets are in the very febrile state," he said. "If your policy actions are not clear, and not understood, there will be a market crisis. It was quite clear that markets were worried about inflation. Markets were in the febrile state. And they were concerned about any change in UK economic policy, therefore, it was vital.

"I said this publicly and privately that: 'you needed to convince the markets that any fiscal action was necessary, not inflationary, and affordable'."

A "maverick left-wing crazy"


Yanis Varoufakis

Former Greek finance minister Yanis Varoufakis - often described as one of the most maverick people to have held such a role in recent history - said that Kwasi Kwarteng's mini-budget was considerably more radical than anything he ever proposed or implemented.

"I was not Maverick at all," he said. "All I tried to do was to say that, you know, we are bankrupt, Greece is bankrupt - that I'm not going to take another credit card to pretend that I'm repaying my loans.

"I should have been celebrated by the most conservative economists and politicians in the world and instead I was demonised as a maverick left-wing crazy.

"Kwarteng, on the other hand, simply followed the strategy of assuming that just because the markets are calm today, they will remain calm tomorrow... and the markets called them out."

However, many market insiders are worried that even now, markets remain in a febrile state.

"The problems haven't haven't gone away," said Daniela Russell, head of UK rates strategy at HSBC bank.

"Perhaps this isn't just an isolated incident, but it could be the sort of a trend. One thing that's particularly concerning to me is that there's an awful lot of debt in the system."
Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×