The Bank of England's effort to communicate more transparently is running into resistance from two of its own policymakers, who argue that the new approach could make it harder to read the central bank's intentions—and may even increase market volatility.
In April, the Bank stopped publishing a single “central” economic forecast and instead began presenting three scenarios. The change followed a review by Ben Bernanke, the former Federal Reserve chair, and came after the Bank had already started publishing each Monetary Policy Committee (MPC) member's explanation of their vote. The goal was to give the public and financial markets a fuller picture of the uncertainties around the outlook.
But MPC members Megan Greene and Alan Taylor have warned that the new format may have unintended consequences. Greene told Parliament's Treasury Committee that while individual vote explanations can be helpful, combining them with scenario-heavy forecasts may reduce the pressure on members to persuade one another into a shared view. Taylor, speaking at an event hosted by Barclays and the Centre for Economic Policy Research (CEPR), said that even if the Bank de-emphasizes a central forecast, “getting it right” becomes more important when communication leans on alternative paths.
What the New Approach Changes
For decades, central banks around the world have used a single “central” forecast as a shorthand for where they expect the economy to go. That forecast acts as a reference point: when inflation or growth data comes in above or below that line, markets can infer how policymakers are likely to adjust interest rates.
By replacing that single number with multiple scenarios, the Bank of England is trying to acknowledge that the future is inherently uncertain. But the shift also removes a clear benchmark. Without it, each MPC member's individual vote and explanation carries more weight, and the committee can appear less like a unified decision-maker and more like a collection of competing views.
The split is not theoretical. Greene recently voted to raise the Bank Rate to 4%, while Taylor voted to hold and said cuts might be needed if inflation pressures cool. Those differences are now more visible—and more consequential—because there is no single forecast to anchor expectations.
What It Means for Markets
For investors, the change matters because it alters how rate expectations are formed. A single forecast acts like a compass: when data arrives, traders can quickly gauge whether the MPC is likely to tighten or loosen policy. Take that away, and highlight individual dissent, and the committee starts to look less like one decision-maker and more like several competing playbooks.
That can increase uncertainty about the near-term path for the Bank Rate. In practice, that uncertainty typically shows up as bigger swings in short-dated UK interest-rate markets, such as gilts and SONIA swaps. And because rate expectations are a major driver of currencies, sterling can start reacting more sharply to each speech, scenario, or surprise vote split.
For everyday investors, the key takeaway is that the Bank of England's communication is becoming less predictable, even as it tries to be more transparent. That could mean more volatility in UK-focused bond funds, currency-hedged ETFs, and any portfolio with exposure to British assets. It also means that individual MPC members' comments—not just the official statement—may move markets more than they used to.
Broader Context
The internal debate comes at a time when central banks globally are wrestling with how to communicate in an unusually uncertain environment. Inflation has been stubborn, growth has been uneven, and the path of interest rates has been anything but clear. The Federal Reserve, the European Central Bank, and the Bank of Japan have all experimented with different ways of signaling their intentions.
The Bank of England's shift is part of that broader trend. But the pushback from Greene and Taylor suggests that the new approach may not be a settled issue. If the committee cannot agree on how to communicate, the confusion could spill over into the very markets the Bank is trying to guide.
For now, investors should watch for further comments from MPC members and pay close attention to the next set of forecasts. The absence of a single central projection may make each data release—and each vote—more consequential than before.
