Curious about monetary policy in Britain? Just tweet at the central bank

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Bank of England chief economist Spencer Dale answers questions on Twitter.
Bank of England chief economist Spencer Dale answers questions on Twitter.
Image: Twitter/@bankofengland

Central bankers pick their words very carefully. Their powerful position pulling the levers of monetary policy gives every statement outsized importance. And in the UK, the newfangled “forward guidance“ policy unveiled by governor Mark Carney has analysts combing the Bank of England’s statements more closely than usual.

The bank has pledged to keep interest rates at their current historic lows until the unemployment rate falls below 7% (it is currently 7.7%). A steady stream of better-than-expected economic news has convinced many that rate hikes will come sooner rather than later. Markets are pricing in a hike in 2015, a year ahead of the guidance based on the central bank’s unemployment forecast.

Against this background, it was surprising for a senior Bank of England executive—chief economist Spencer Dale—to appear on Twitter today for an extensive public Q&A under the hashtag #AskBoE. Normally bank officials are seen delivering obtusely worded speeches or artfully dodging questions from journalists at press conferences.

This is what we learn when central bankers exposes themselves to the masses on social media, and have to explain themselves in 140 characters or less:

Don’t expect a rate hike next year, the bank tells a user pretending to be Yoda

“Forward guidance” encourages the bank to keep monetary stimulus flowing for longer than it might otherwise

The bank has lots of things on which to blame its failure to keep inflation in check

Quantitative easing is not evil

Low interest rates hurt savers, but they’re necessary for growth

Higher interest rates might hurt homeowners, but should make them wealthier too

The bank knows the US debt ceiling debate has only been deferred, not solved

EU membership is good for Britain, but the bank would rather not step into that political minefield

The bank won’t give bond investment advice to a user with Kim Jong-un for an avatar

The bank’s chief economist is a fan of his high school economics teacher and subscribes to no particular economic theory

Even senior officials don’t pass up an opportunity to praise their boss

The gold in the bank’s vault is nice and tidy

This being the internet, cat photos are inevitable. Also, central bankers like bad puns