ALEX BRUMMER: Bank of England boss Andrew Bailey in the firing line as the government prepares for more money
Those who questioned whether Andrew Bailey was the right person to become Bank of England governor cannot help but be impressed by his clever response to the Covid-19 emergency.
No sooner had Bailey entered the Bank’s major portals than he poked his hand with tricks to unleash an additional £ 1 billion in quantitative easing, cut interest rates to the bone by 0.1 percent and the Bank’s own credit facility start up for companies with British activities and creditworthiness.
Bailey has not been shy to raise his eyebrows to ensure that major banks take on the challenge of lending to small and medium-sized enterprises. He recognized early on that existing schemes would not work for the smallest companies.
Bank of England boss Andrew Bailey is not shy to raise his eyebrows to ensure that the big banks take on the challenge of lending to SMEs
In crisis, it is inevitable that central banks cooperate with the government. But there are concerns that Bailey’s “doing what it takes” jeopardizes the bank’s independence by blurring the lines between monetary and fiscal policies.
The governor noted in a recent podcast that Whitehall may have struggled to finance himself through the lockdown in the short term without the bank.
With the government on the verge of spending more money today with £ 2 billion in support for young people, the arts, the green agenda, stamp duties and much more, the Bank’s purchase and ownership of gold shares will become even more important .
Many of these issues would have been high on the agenda when Bailey made a rare appearance for the 1922 Committee of Tory backbenchers tonight.
It would have been the first meeting since Eddie George was governor two decades ago.
After indicating that the meeting would continue, the Bank postponed the meeting, citing the clash with the Chancellor’s economic statement. A similar briefing is apparently planned with Labor MPs.
Former Monetary Policy Committee member Andrew Sentance wonders why a private meeting has been agreed, rather than an open forum for MPs of all levels.
Both the decision to do business with the 1922 Committee and the cancellation could be construed as an infringement of the Bank’s independent task.
A more friendly interpretation is that Bailey is determined to portray politicians in times of grave national danger.
Look at the fees of the advisors on a merger or bidding document and there is certainly money for communications advisers.
Such specialists can make a real difference in shaping a public debate by successfully defending a company, such as when Finsbury helped Astrazeneca ward off Pfizer in 2014.
Public relations specialists are the hidden hand in many corporate events.
In expanding WPP into a global advertising giant, former CEO Martin Sorrell purchased a network of unrelated communications companies around the world.
Successor Mark Read cleans up. He allows three – Finsbury, founded and run by City sniper Roland Rudd, the German Hering Schuppener and the American Glover Park Group – their freedom.
They deviate from WPP in a deal that allows the listed group to retain a 50.1 percent stake in the combined company.
No financial data is provided, but Refinitiv suggests that the deal could deliver a value of £ 250 million to the company.
The aim is to strongly stimulate the 700 employees by offering equity. As with many mergers, there is a breakdown of top positions.
Rudd becomes a co-chairman alongside his American counterpart Carter Eskew with whom he already works. Alexander Geiser, managing partner of Hering Schuppener, becomes CEO.
Such arrangements, as any good PR person would tell you, can end in tears.
Are there any bets on who comes out best?
Glaxosmithkline steps up its efforts in the race for a Covid-19 vaccine.
The latest collaboration is with Medicago, the biopharmaceutical arm of the world’s largest tobacco company, Philip Morris.
The plan is to use GSK’s vaccine technology, with Medicago’s plant-based vaccine candidate neutralizing antibodies. Testing will begin soon.
The target is doses of 100 million by 2021 and 1 billion by 2023. That still seems a long way off.
But according to previous vaccine standards, progress with the candidates for the coronavirus vaccine is moving at Formula 1 rates.