In a thinly veiled rebuke of the Trump administration, Bank of England Governor Andrew Bailey has urged global financial leaders to "challenge back" against the rising tide of populism. Speaking ahead of the Davos summit, Bailey warned that the isolationist policies championed by the new US leadership pose a direct threat to global living standards.

"We have to call out messenger shooting," Bailey declared, referring to the attacks on independent institutions like the US Federal Reserve. His comments come as central bankers worldwide rally around Fed Chair Jerome Powell, who is facing a criminal probe initiated by the Justice Department.

The Cost of Populism

Bailey outlined the economic danger of turning inward:

• Inflation Risk: Trade barriers and tariffs act as a tax on consumers, driving up prices for ordinary households.
• Institutional Erosion: Attacking central bank independence undermines investor confidence, leading to higher borrowing costs.

A Message for Leaders

The Governor’s speech is a rallying cry for the "technocratic class" to defend the global rules-based order. [...](asc_slot://start-slot-9)"The rise of so-called populism makes the task of raising living standards harder," he said. As Kenya navigates its own debt obligations in a high-interest global environment, the stability of these western institutions remains critical. A populist-driven dismantling of the Fed or the IMF would leave emerging economies exposed to the harshest winds of the global market.