Last week, I wrote here that 14 October was the key date in British politics, because the expiry of the Bank of England’s gilt-buying programme would force the Government to act to lower gilt yields. Be in no doubt: the sacking of Kwasi Kwarteng today is a consequence of the Bank’s refusal to go on supporting bond prices and artificially shielding the Government from the credibility-shredding consequences of the September fiscal statement.
That’s not to say the Bank planned or engineered this. I don’t think Andrew Bailey, the Governor, is a Machiavellian political strategist. It’s just to say that the nature of the UK’s economic and financial position is that the Bank’s decisions have huge political impact. And that impact is far from over. Here’s another date from the Bank that could prove politically pivotal: 31 October.
Liz Truss began her campaign for the Tory leadership promising radical reform of a central bank she said was failing
Everyone at Westminster knows that’s – nominally – the date for the next fiscal statement.
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