ALEX BRUMMER: Belated pledge by Bank of England boss Andrew Bailey

So now Bank of England Governor Andrew Bailey is having his Mario Draghi moment.

The Bank says the Monetary Policy Interest Rate-Setting Committee (MPC) “will not hesitate to adjust interest rates as much as necessary to bring inflation back to the 2 percent target.”

Since every drop in the pound adds to the price of imports, Bailey and his team are trying to underline that they are on the case. The Treasury also helps to boost confidence.

Chancellor Kwasi Kwarteng has asked the Office for Budget Responsibility (OBR) to provide some scaffolding for a tax plan to be unveiled on November 23.

Whether or not the Bank and Treasury will work together will be enough to convince the market that this isn’t 1976 and the UK isn’t joining the emerging markets is the unanswered question.

The events of the past few days, the slippage of sterling on the foreign exchanges and the sharp rise in gold yields, need to be unpacked.

The reality is that the Bank led by Bailey has never missed an opportunity to miss an opportunity.

The governor impressed when he took charge of Threadneedle Street in March 2020, acknowledging the dangers of the coronavirus to markets, businesses and jobs.

That determined start is gone. On Thursday, at its September meeting, the MPC had every opportunity to put a bottom under the pound and stabilize gold yields.

The Old Lady’s older sister, Sweden’s Riksbank, had previously raised interest rates by a full percentage point and the Federal Reserve had raised US interest rates by three-quarters of a point.

The answer from the Bank of England? A slack half point increase on a split decision, with three hawks wanting more.

If the action of the other central banks, the rise in the almighty dollar and the weakness of sterling weren’t enough signals for Bailey to do what was needed, it’s hard to see why.

The potential costs of the energy rescue operations were fully known. The Chancellor’s biggest tax changes – the reversal of national insurance and corporate tax contributions – have been visible for weeks.

The MPC should have gotten some idea of ​​fiscal easing from the Treasury’s observer at the Bank.

It would have been much better for the Bank to focus on bank rates rather than funneling another £8.7bn in government bonds into a market that is likely already struggling with excess issuance.

Another piece of misinformation filling the ether needs to be challenged. Yes, in the rush to make policy decisions before the party conferences, there was no OBR report on the Truss/Kwarteng plan.

Nevertheless, as happened in Covid (the energy shortage is its equivalent) and when earlier energy aid was exposed this year, the Treasury did give minute details.

Kwarteng’s blue book ‘Growth Plan’ shows the estimated costs up to 2026-27. So the idea that the government was flying blind is poppycock.

Neither the Treasury, which lost its top official Tom Scholar, nor the Bank of England are happy ships. Bailey fears that if things go horribly wrong and a full-blown monetary/economic crisis erupts, he will be scapegoated.

Better focus on dealing decisively with the problems ahead than worrying about the history books.

long goodbye

Alan Jope’s departure as Unilever chief executive next year has been on the agenda since the failed £50bn bid for Haleon, the health arm of GSK, was leaked in January.

Whatever or not the merits of the bid (GSK should have taken the money and run away) someone, somewhere was determined to undermine its credibility.

To Jope’s credit, he stoically reorganized his business and focused on growing promising new health and beauty brands organically, despite the slingshots of Terry Smith of Fundsmith and American activist Nelson Peltz.

The latter can never be trusted when it comes to totemic British brands.

Never forgetting Unilever’s antecedents, Jope stood up and was counted in the face of the Ben & Jerry’s board’s efforts to ban Unilever for selling ice cream in the West Bank.

He showed moral leadership in the face of heavy fire.