Andrew Bailey’s pessimistic pre-Budget warning

With a week to go until Rachel Reeves’s first Budget, Andrew Bailey has today sounded a note of gloomy caution. Speaking at a Bloomberg event in New York, the Governor of the Bank of England channelled the mythological Cassandra, whose warnings were accurate, but ignored. He told his audience today that ‘Cassandra was fated by the god Apollo to utter true prophecies but not to be believed’.

Bailey’s meant to remind the audience that memories of financial crises recede over time. He warned against ‘the trap of complacency’, saying:

I can observe this happening with the global financial crisis fifteen years or so on. I do get people telling me that ‘you have solved that one so we can relax’. But the work I set out above on theory and history is timeless. So, let’s not fall into the trap of complacency.

His solution is better surveillance tools for regulators, especially for the ‘very large and growing’ non-bank sector, which is less transparent than the banking system.