London Daily

Focus on the big picture.
Sunday, Sep 14, 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
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
×