The Governor of the Bank of England has issued a stark warning that the growing wave of populism around the world is severely complicating the work of international financial institutions. Andrew Bailey stated that these bodies, tasked with identifying global economic imbalances, face a much harder challenge due to this political shift.
A Defence of Uncomfortable Truths
Speaking to the Bellagio Group of economists and central bankers, Bailey emphasised the crucial, often unpopular, role of international agencies. "Part of the purpose of international agencies is that from time to time they have to tell us what we don’t want to hear, let alone act upon," he said in his speech on Friday, 16 January 2026. He argued that while these institutions must be held accountable for their assessments, there is a dangerous trend of "messenger shooting" that must be confronted.
The Threefold Challenge of Populism
Bailey outlined a trio of specific threats posed by populist movements. Firstly, he noted a tendency to blame external forces for unfavourable domestic conditions, rather than acknowledging shared global challenges. Secondly, he warned that populism encourages a "decline in trust", leading the public to view both domestic and international institutions as distant, unresponsive, and serving powerful, unaccountable interests.
"For those of us who are institutionalised, the answer is that we have to challenge back, in deeds more than just words," Bailey declared, calling for a robust defence of established economic governance.
Solidarity with the US Federal Reserve
The Governor's comments were made against a backdrop of heightened tension between the administration of US President Donald Trump and the Federal Reserve. Although Bailey did not name specific countries or leaders, the context was clear.
On Tuesday, 13 January 2026, Andrew Bailey signed a powerful statement of support for Fed Chairman Jerome Powell. This move saw him unite with the heads of central banks from Europe, Sweden, Canada, and Australia. The collective statement affirmed they "stand in full solidarity" with the Fed, stressing it was "critical" to preserve central bank independence.
This show of unity came directly after Chairman Powell revealed the Fed was facing threats of a criminal indictment. This related to his testimony concerning renovation projects at the central bank's offices. Powell described this as an "unprecedented action" that should be seen within the "broader context of the administration’s threats and ongoing pressure." President Trump has repeatedly criticised Powell and the Fed for not cutting interest rates as aggressively as he desires.
Bailey's intervention marks a significant moment where the world's leading central bankers are drawing a clear line in defence of their operational autonomy against political pressure, identifying populist rhetoric as a core threat to global economic stability.
