The Bank of England's governor Andrew Bailey said the central bank's decision to pivot to quantitative tightening did not have “any connection” with the events in the banking system in recent months.
He reiterated that no stress was felt in the UK banking sector as a result of the collapse of SVB and Signature Bank, or the rescue sale of Credit Suisse to UBS. At a Treasury Select Committee hearing today (18 May), BoE representatives defended the decision to initiate QT last year. BoE governor Bailey signals further rate hikes in face of inflation uncertainty Bailey said the move was "important" to allow the central bank's balance sheet "to adjust so it has headroom to do whatever [it] might need to do in the future". The governor added that the BoE's balance sheet needed to ...
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