There is nothing wrong with independent thought. Indeed, avoiding ‘groupthink’ is now one of the driving lights of good corporate governance. Having competing views around the table has been a hallmark of leaders from Abraham Lincoln to Margaret Thatcher, and as a rule it creates better decisions and proper stress-testing.
There has of course been one key facet of all of those occasionally fractious policy debates: they tend to happen behind closed doors. At the Bank of England, meanwhile, it is now de rigeur for the nine members of the monetary policy committee to contradict each other on the speech circuit.
Traders looking for clues as to when we might see an interest rate cut are forced to change their view more often than they change their underwear. The public pronouncements of the nebulous nine are making the Bank of England a laughing stock.
Occasionally, as journalists, we are asked to give friendly advice on what a good ‘comms strategy’ might look like. The Bank of England hasn’t asked us, but we’ll volunteer anyway. Here it is: tell everybody to shut up until you’ve decided what you’re going to do.
By all means, have a vigorous debate amongst yourselves. Have an away day. Throw your phones in a locker, get drunk, do brainstorms and thought-showers and meditate: bat around every idea under the sun.
But what Threadneedle Street will no doubt see as nine independently-minded economists contributing to a vigorous debate now runs the risk of making public pronouncements from the central bank as much use as a tweet from a bot. If it doesn’t mean anything, it doesn’t get heard.
The Bank’s reputation is already in the basement. About the only people still listening are those in the City. But even we’ll tune out soon.
