Bank of England rate-setter Megan Greene said it’s “absolutely crucial” that central banks retain their independence, but insisted she fears no echoing of U.S. President Donald Trump’s attacks on the Federal Reserve.
U.S. stocks fell at the start of the week after Trump intensified pressure on Jerome Powell to cut interest rates, referring to the Fed chair as “Mr. Too Late, a major loser.”
Speaking exclusively to Bloomberg, Greene said “credibility is the currency of central banks and I think independence is quite an important piece of that.” She said the BOE can credibly try to hit its targets as it’s free to make its own decisions.
The BOE has faced occasional criticism from Conservative politicians in recent years. Tory Member of Parliament David Davis said ahead of last year’s election that it should be stripped of its operational independence, while Liz Truss pledged to review the BOE’s mandate ahead of her short-lived spell as prime minister in 2022.
Still, the BOE’s independence — granted by the then-Labour government almost three decades ago — was not threatened by either Rishi Sunak’s premiership between 2022 and 2024 or the current Labour administration.
“At the Bank of England, I don’t see any reason to worry about central bank independence anymore now than ever. I just think it’s crucial that we have it, that’s how you can maintain your credibility,” said Greene, a dual U.S.-U.K. national who studied at both Princeton and Oxford universities.
She added that high inflation has put the public gaze on the BOE in recent years. “But am I worried about our central bank independence off the back of that? No.”
Tom Rees and Francine Lacqua, Bloomberg News
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