The Bank will host a seminar of all London's major economists next Tuesday – the first time it has invited them in en masse in recent memory – in what has been construed as a sign that it fears market participants are starting to lose faith in its efforts to pump cash into the economy. The move has also sparked speculation that it is poised to announce a major change to the monetary policy framework, although insiders dismissed such suggestions.
The suspicion that the Bank will soon take action to mitigate this has pushed down market interest rates sharply and contributed to an almost 5pc fall in the pound against other leading currencies. It has caused gilt prices and short-term interest rates to fluctuate wildly in recent weeks.
The Bank's seminar, chaired by deputy Governor Charlie Bean, alongside chief economist Spencer Dale and markets director Paul Fisher, is intended to clear up this confusion. It sparked anticipation in the City not merely because the Bank has a reputation for extreme secrecy, but because some suspect it may come alongside an announcement over the Bank's reserves policy. Others suspect the Bank is concerned that many think either that QE amounts to printing money, much as Zimbabwe and Weimar Germany did, or that it simply is not working.