Populism Threatens Central Banks' Independence, Warns Bank of England Boss

Central banks worldwide are facing a significant challenge due to growing scepticism towards public institutions. According to Andrew Bailey, the Bank of England's boss, this is a 'serious challenge' that central banks must address.

Bailey defended the independence of central banks from short-term political pressures, saying they should be insulated from these forces but remain accountable to Parliament.

He noted that populism is a particular threat to central bank independence, as populist movements often view institutions like central banks as 'unrepresentative elites' standing in the way of popular sovereignty.

Bailey stressed that central banks cannot take their legitimacy for granted and must communicate clearly with the public while remaining accountable to elected representatives.