Physically they are in the same space, and they engage in the same business – stuff to do with money, big numbers changing colour on computer screens.
In reality, their interests don’t always align and they are sometimes at loggerheads.
That’s more than double what inflation should be – the Bank is making a hash of it, say the City boys (and girls).
But the Bank is looking at all this from a rather different standpoint.
The City trader wants to make a splash, or better still make some money, Right Now. By the end of the day, or preferably in the next five minutes.
The Bank is taking a longer view. Its concern is with the family in Rotherham trying to pay a mortgage rather than with the trader, who can surely look after himself.
Governor Andrew Bailey wants to keep rates as low as possible for as long as possible, to give the UK economy every chance of escaping from the clutches of a Covid recession.
If there’s inflation in the short-term, well, it will live with that until it decides a trigger needs to be pulled. Rates now look likely to go up in December given the inflation statistics and news from the jobs market on Tuesday.
If it does that, expect City folk to moan that it should have pulled that trigger much earlier.
Some of the City commentary towards the Bank just now is tart, to say the least. It can’t be trusted. It is behind the curve. It doesn’t know what it is doing.
Well, perhaps. Then again, the Bank has got more information than anyone else on how the economy, including specifically the economy outside of London, is doing.
The Bank still thinks that inflation will pass, that the greater risk is the economy falling back into negative growth. That inflation in fact becomes too low, rather than too high.
And rather like the Queen, Andrew Bailey can’t really respond directly to every bit of criticism that comes his way.
It would be nice if he went on Radio 4 and said “I’m not taking advice from a bunch of shifty self-interested spivs in shirt-sleeves”, but that would be unbecoming for the governor of the Bank.
So he has to take it on the chin at least for now. Assuming the Bank holds its nerve and inflation does indeed begin to disappear early next year, he might find a way to remind us that he was right and the City spivs were wrong.
The short-termers will by then have forgotten what they said and changed their tune.