Want to know what's next for interest rates ? Don't listen to the Governor of the Bank of England ...

Andrew Bailey was speaking at an event in London this week, hosted by Brunswick, the public relations firm. What next for monetary policy? What was the Governor saying? The press reaction was mixed, confused and slightly controversial.

According to Mehreen Khan in the Times the Bank of England hinted at more rate rises to tame inflation.

According to Larry Elliott in the Guardian, the Bank of England boss signalled that interest rates may heave peaked after ten successive increases in the official cost of borrowing since December 2021.

In the Telegraph, "Andrew Bailey down played talk of a sharp rise in interest rates" according to Szu Ping Chan.

For Sky News "Bailey suggested interest rates may rise less than previously thought signalling there is no urgent need for hikes" and in the FT "Andrew Bailey signals no pressing need for more UK interest rate rises."

Some were even led to think the Governor was saying interest rates may have peaked.

So what did the Governor actually say? Bailey may have hinted that more interest rate rises may be "appropriate" to contain inflation but made it clear that no decisions had yet been made ahead of the next meeting of the MPC.

He said the monetary policy committee would wait for an extra round of data on inflation and the labour market before making a judgment on raising rates again at the meeting on March 23rd.

"I would caution against suggesting either that we are done with increasing Bank rate or that we will inevitably need to do more. Some further increase in Bank rate may turn out to be appropriate but nothing is decided. The incoming data will add to the overall picture of the economy and the outlook for inflation and that will inform our policy decisions."

However the governor did warn the Bank was alert to the risk of repeating the mistakes of the 1970s and would not hesitate to raise rates further should inflationary pressures embed.

So what's next for monetary policy? Rates may go up, they may go down, they may increase dramatically or not as dramatically as some expect.

Obfuscation, the action of making something obscure, unclear, or unintelligible, is an art form of the central banker.

Alan Greenspan 13th Chairman of the Federal Reserve would say, "If I appear to be particularly clear, then you have clearly misunderstood what I have said".

Bailey may have been slow to pick up the lingo, but he appears to be in the swing of it now. Want to know what's next for interest rates ? Don't listen to the Governor of the Bank of England. Read our Friday Forward Guidance in the Saturday Economist instead. JKA