Bank of England’s Andrew Bailey warns political attacks on Fed threaten central bank independence
Bailey tells MPs he is “very concerned” as US president presses the Federal Reserve for rate cuts and takes action against Fed officials
Bank of England Governor Andrew Bailey said he was "very concerned" about recent attacks on the Federal Reserve and warned that threats to central bank independence represent "a very dangerous road to go down."
Bailey made the remarks during testimony to MPs on Wednesday, saying the pressure on the Fed had created "a very serious situation." His comments came as President Donald Trump has publicly pushed for quicker and deeper interest-rate cuts, and after an unprecedented firing of Fed governor Lisa Cook amid repeated threats to remove Chair Jerome Powell. European Central Bank President Christine Lagarde has issued similar warnings, calling the attacks a "serious danger" for the global economy.
Central bank independence refers to the ability of monetary authorities to set policy free from direct political influence, allowing decisions to be made with a view to long-term economic stability rather than short-term political objectives. Bailey said that independence underpins the credibility of monetary policy and helps anchor inflation expectations, a point echoed by Lagarde in recent remarks to European lawmakers.
Bailey’s intervention underlines growing concern among senior central bankers about political interference. He told MPs that safeguarding the institutional independence of central banks was important for effective management of monetary policy and the financial system. He added that moves which undermine that independence could damage public trust and complicate policy decisions.
The exchange comes at a sensitive moment for global markets, as central banks confront persistent inflation, uneven growth and the need to communicate policy paths clearly to businesses and investors. While Bailey did not outline new policy steps for the Bank of England, his comments were framed as a defense of the principle that monetary policy should be set by independent technocrats tasked with long-term economic objectives.
Bailey’s statement aligns with a broader line of commentary from international monetary authorities who have warned against the politicization of central banks. Such warnings emphasize that sustained political pressure on rate-setting bodies can increase uncertainty for markets and households and make it harder for monetary authorities to deliver on mandates such as price stability and financial-system resilience.
His remarks on Wednesday add to a series of high-profile exchanges between political leaders and central bankers this year, highlighting tensions over interest-rate strategy as economies adjust to changing inflation dynamics and growth prospects. Bailey and other central bank chiefs have repeatedly stressed the value of institutional safeguards that allow them to make decisions based on economic analysis rather than electoral cycles.
The governor’s comments were published on Sept. 3, 2025, following his session with members of Parliament.