Bank of England lacked access to data to help with Covid-19 response – governor

Bank of England governor Andrew Bailey has said the central bank was restricted from accessing some Government data during the Covid-19 pandemic which could have helped it respond to the economic crisis.

Mr Bailey told the UK Covid-19 Inquiry that policymakers would have benefited from having easier sight of data, such as universal credit.

The third stage of the independent public inquiry is examining the economic response of the Government to the pandemic.

Mr Bailey, who became the Bank’s governor in March 2020, coinciding with the onset of the pandemic, and former governor Lord Mervyn King were giving evidence on Thursday.

The Bank chief told the inquiry: “Covid, for me, pointed to a few areas where the system creaked a bit more.

“There were a few areas where there were restrictions to access to data that were embedded in law… where it would have been nice if we could have gone into the sectoral data that the Government has but the law says that they can’t share it.

“I think it would be helpful if we could get more easily sight of things like universal credit data,” he said, clarifying that this would be aggregate rather than individual figures.

“There are many puzzles today that persist.

“I don’t think we’ve still done enough to say how can we put the economic data and the health data together and get better wisdom out of it.

“I don’t want to suggest that it would have produced particularly different outcomes but it would have been good to have been able to see it.”

Mr Bailey said he felt the relationship between the Bank and the Government was “very good” throughout the pandemic and that the briefings given by England’s chief medical officer, Professor Sir Chris Whitty, were “one of the most valuable things we had access to”.

He praised former chancellor Rishi Sunak for “his diligence and commitment”, adding: “We had a very close relationship – we were talking daily at the height of the Covid problems.”

The Bank of England cut interest rates from 0.75% to 0.1% in just over a week during March 2020.

Rates did not begin rising again until December 2021, and gradually edged up to a peak of 5.25% last year.

Lord King, who was the Bank’s governor from 2003 to 2013, criticised the “slow response” from policymakers to begin tightening monetary policy after Covid.

“I think most central banks today would recognise that they were very slow to raise interest rates,” he told the inquiry.

“My own feeling is that it would have been better to  have recognised, at some point in the first half of 2021, that it had been a mistake to stoke up demand too much… then at some point you had to unwind all of that.

“It’s striking that bank rate didn’t rise above its pre-Covid level until well into 2022.”

He said he was in the “minority” of economists at the time who thought that cutting interest rates risked pushing up inflation too much.

Consumer Prices Index (CPI) climbed after the pandemic to hit a high of 11.1% in October 2022.