London Daily

Focus on the big picture.
Sunday, Aug 24, 2025

'Go big and fast' - BoE's Bailey says bond-buying best in times of crisis

'Go big and fast' - BoE's Bailey says bond-buying best in times of crisis

The Bank of England appears to get the most bang for its bond-buying bucks if it goes “big and fast” at times of crisis, its Governor Andrew Bailey said, suggesting the central bank might sell off some of its debt pile in calmer times.
Bailey also said the BoE currently had plenty of ammunition to support the economy through its coronavirus shock, but there might eventually be limits to how much government debt is available for central banks to amass if crises keep coming.

Since becoming governor in March, just as the COVID-19 pandemic hammered the world economy, Bailey has overseen a 300 billion-pound ($399 billion) expansion of the BoE’s bond-buying programme - taking it to 745 billion pounds - and has cut its key interest rate to a record low 0.1%.

Central bankers around the world are trying to fine-tune their largely depleted stimulus tools.

On Thursday, Federal Reserve Chair Jerome Powell announced a shift in the U.S. central bank’s thinking, putting more weight on boosting employment and less on worries that inflation might be heading too high.

Speaking to an online conference hosted by the Fed on Friday, Bailey said BoE research showed bond-buying was most effective at times of crisis in financial markets.

“In the decade ahead, I think we need to take on board the message the COVID crisis has reiterated, namely that our tools may be state-contingent in their effects,” he said.

“And with that in mind, let’s not ignore the need to manage central bank balance sheets to enable such state contingency to take effect. There are times when we need to go big and go fast.”

Bailey has suggested selling bonds back to the market before raising interest rates, breaking with the sequencing that the BoE previously favoured.

On Friday he said “the appropriate policy mix going forwards over a decade may be more nuanced than previously thought”.

But he said any decision about selling debt was not imminent.

The BoE published research on Friday that showed it could be possible to sell government bonds at a time when that would have less impact than raising rates, creating extra headroom for future action.

Bailey also reiterated in his speech that negative rates were now part of the BoE’s toolbox.

“We are not out of firepower by any means, and to be honest it looks from today’s vantage point that we were too cautious about our remaining firepower pre-COVID,” Bailey said.

Any next move by the BoE to support the economy is widely expected to be a further increase in the bond-buying programme.

Britain’s GDP shrank by a record 20.4% in the second quarter, the most severe contraction of any major economy.

The BoE has said the economy is likely to recover its pre-pandemic size at the end of next year. Many economists think it will take longer than that.
Newsletter

Related Articles

0:00
0:00
Close
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
Nurse who raped woman continued working for a year despite police alert
Drought forces closures of England’s canal routes, canceling boat holidays
Sweet tooth scents: food-inspired perfumes surge as weight-loss drugs suppress appetites
Experts warn Britain dangerously reliant on imported food
Family of Notting Hill Carnival murder victim call event unmanageable
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
×