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Bank of England to probe possible leak of QE decision to Sun newspaper

David Milliken and Elizabeth Howcroft
·3-min read
FILE PHOTO: The spread of the coronavirus disease (COVID-19) in London
FILE PHOTO: The spread of the coronavirus disease (COVID-19) in London

By David Milliken and Elizabeth Howcroft

LONDON (Reuters) - Bank of England Governor Andrew Bailey said he would look into how The Sun newspaper reported that the central bank would expand its bond purchase programme by 150 billion pounds, hours before it was officially announced.

Leaks of BoE policy decisions are almost unheard of, but a series of government decisions on COVID measures, including economic support, have been reported in British newspapers ahead of their official announcement.

"Obviously, I don't like seeing speculation about what we're going to do appearing ... and yes, we will look into it," Bailey told reporters when asked about The Sun's report.

In a story first published online around 2130 GMT on Wednesday, The Sun said the BoE's stimulus would be larger than the 100 billion pounds largely expected by economists and was "likely to be around 150 billion pounds".

The same article, citing unspecified sources, also said finance minister Rishi Sunak would broaden job furlough support in a statement to parliament, which he did on Thursday.

Before the announcement of the BoE decision, only the BoE and Britain's finance ministry should have known its details.

A finance ministry representative sits in on the BoE's monetary policy deliberations and Sunak must formally approve expanded asset purchases.

The finance ministry had no immediate comment on whether it could have been the source of the story. A government spokesman said any leak was a matter for the BoE.

Prime Minister Boris Johnson has begun a separate investigation into media reports last week of his plan to order England into a month-long coronavirus lockdown, starting this Thursday, which forced him to bring forward the announcement.

Michael Hewson, chief market analyst at brokers CMC Markets, said the report in The Sun was "extremely concerning" and that there needed to be a full inquiry.

"These policy decisions are important macroeconomic events, and given the Bank of England also acts as a regulator, it’s bang out of order."

There were some signs of greater trading volumes than normal in sterling overnight, when there were also developments in the count of the U.S. elections and a separate article in the Daily Telegraph about the prospect of negative interest rates.

Sterling rose sharply against the U.S. dollar <GBP=> when the BoE announced the greater stimulus at 0700 GMT but provided no fresh update on the possibility of negative interest rates.

Last month, Britain's Financial Conduct Authority concluded there had been no misconduct when a company contracted by the BoE to help provide video feeds of its public news conferences also sold traders slightly faster audio of the same events.

The BoE said its staff should have spotted what it viewed as misuse of its broadcast feeds sooner, and barred the business from working with it in future.

The FCA declined to comment on the latest incident.

(Additional reporting by Elizabeth Piper, Huw Jones and Saikat Chatterjee; writing by David Milliken; editing by Guy Faulconbridge, Larry King)