The Bank of England does not need to ‘follow the Fed’
Financial Times
February 25, 2026
AI-Generated Deep Dive Summary
The Bank of England (BoE) has increasingly distanced itself from following the policies of the US Federal Reserve, emphasizing its commitment to independent decision-making tailored to the UK's unique economic conditions. Unlike previous periods when the BoE closely aligned with the Fed, recent moves reflect a shift toward domestic-focused monetary policy. This approach is driven by the belief that the UK's economic challenges, such as managing inflation and supporting growth, require targeted measures rather than mirroring US strategies.
The article highlights how the BoE's divergence from the Fed has been particularly evident in its interest rate decisions. While the Fed has raised rates aggressively to combat inflation, the BoE has adopted a more cautious stance, focusing on stabilizing financial markets and addressing specific UK economic vulnerabilities. This independence is seen as an effort to avoid past mistakes where excessive copying of US policies led to market instability or misaligned monetary tools for the UK economy.
The implications of this shift are significant for both domestic and global markets. By prioritizing homegrown solutions, the BoE aims to maintain economic stability without being overly influenced by external factors. This strategy could enhance investor confidence in the UK's financial resilience, particularly as global economic uncertainties persist. The article underscores the importance of central banks tailoring policies to their unique contexts, rather than blindly following other nations' approaches.
Ultimately, the BoE's decision to chart its own course highlights the growing recognition that one-size-fits-all monetary policies are inadequate in today's interconnected yet diverse global economy. For businesses and investors, this signals a more localized approach to managing economic risks, which could foster stability and adaptability in the UK market.
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Originally published on Financial Times on 2/25/2026