It’s time for a makeover at the Bank: The old lady is tied to the head by collective thinking, says ALEX BRUMMER

The Bank of England never misses an opportunity to miss an opportunity.

Last week, it stood by and kept bank rate at 5 percent after the European Central Bank (ECB) and the US Federal Reserve cut borrowing costs to boost growth.

Governor Andrew Bailey remains on the same page and is focused on meeting the 2 percent inflation target.

Bailey told the Kent Messenger he was encouraged by the direction of prices, adding that the path of interest rates “will be gradually downwards”.

Why gradually? Barring a new supply shock, there is no reason to think that consumer prices will deviate much from the target, despite some worrying wage agreements in the public sector.

Bailey tended to view his role more broadly. At the start of the pandemic, he was the most sensible voice in the room, arguing that it was crucial for a bewildered Conservative government to avoid economic fallout.

Bailey cut interest rates, embarked on an aggressive round of quantitative easing and urged the government to come up with ideas to save businesses and jobs.

It used the Bank’s balance sheet to lend to FTSE 100 companies and companies with acceptable credit ratings. It was a formidable intervention that went far beyond the Bank’s core mandate.

After the great inflation of 2021-23, when the Bank failed to counter rising prices, Bailey and the Monetary Policy Committee (MPC) retreated into a defensive role.

The Bank needs to rediscover its spirit of adventure and pay more attention to the broader economy.

In an article published in the FT, Tony Yates, a former adviser to the Bank, suggests that Labour change the mandate of the Monetary Policy Committee so that, in the style of the Federal Reserve, it follows a path between controlling inflation and supporting the real economy through output and employment.

Previous Governor Mark Carney initially tried to focus on jobs, but the goal became redundant when unemployment fell sharply.

Rachel Reeves worked at the Bank for six years, including time on the Inflation Report which guides interest rate setting.

Changing the old lady’s goals should be a priority. As vacancies occur on the Monetary Policy Committee, members tied to group mentality should be replaced by economists, industrialists and labor market specialists with a broader perspective.

In the meantime, the Bank must act boldly and take the burden of unreasonably high rates off borrowers’ shoulders. At present, the Bank is proving to be even more sclerotic than the slow-moving ECB coach.

Life of Pi

One of the key drivers of growth for Labour would be to free up pension fund assets to invest in high technology and infrastructure. There is no shortage of innovation.

The big challenge is to keep the pioneers, the patents and the jobs in Britain. The microcomputer manufacturer Raspberry Pi, which went public in London in June, is proving what is possible. Its profits rose by 47% in the first half of this year.

Investors who backed the launch have gained 36.1 percent since the initial public offering. Fund managers’ neglect of British companies has seen ownership of too many British tech companies disappear over the horizon.

The latest to go is cybersecurity pioneer Darktrace, when its services have never been in such high demand.

It joins Google-owned AI champion Deep Mind and industrial software maker Aveva, now in French hands. The Cambridge trading brain drain would be unnecessary if UK asset managers were less risk-averse.

Energy vacuum

Keir Starmer may have found some optimism in his speech at the Labour conference, but there were few eye-catching initiatives.

There will be some sighs of relief in Aberdeen as Europe’s most important oil and gas city is unveiled as the home of a diminished Big British Energy (GBE).

By all indications, there are several alternative energy projects, including solar farms, ready to go. So far, as Centrica boss Chris O’Shea noted this week, there has been silence on major new projects that need Whitehall support.

These include expanding gas and eventually hydrogen storage, and taking advantage of the opportunity to repurpose the Morecambe gas field.

Energy Secretary Ed Miliband and GBE chief executive Juergen Maier need to get their act together.