December 11, 2023

Bank of England Deputy Governor Ben Broadbent said in a speech today (March 30) that central banks could run into trouble if they try to be too predictable.

Central banks often use forward guidance on the path of interest rates as a means of countering the zero lower bound. Broadbent concedes this “could be an advantage”, especially if there is a risk of deflation.

But he pointed out that the Bank of England has often misinterpreted the words of senior officials as promises to act