A Common Central Bank Tool: Fearmongering

by Tho Bishop

Today the Bank of England announced that it would follow the lead of the Federal Reserve and maintain interest rates at .5%. The bank didn’t stop there however, warning voters that next week’s Brexit referendum posed “the largest immediate risk facing UK financial markets, and possibly also global financial markets. “ Considering the growing public support for the UK’s separation from the EU, the statement can be seen as a last ditch effort by the BoE to push back against the effort and the move has been strongly criticized by British politicians skeptical of the EU.

Of course central bankers using their position of influence to try to street the actions of both policy makers and voters is nothing unusual. (In fact, manipulation of public opinion has become an explicit policy tool of central bankers in recent years.)

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