King's College London

The independence of the bank has been in the spotlight in recent months amid soaring levels of inflation in the UK, but research by academics Dr Christel Koop and Dr Michele Scotto di Vettimo suggests the media has played a key role in providing the oversight which some fear is missing.

The study, How do the media scrutinise central banking? Evidence from the Bank of England, has been published in the European Journal of Political Economy.

Dr Koop, from King’s College London, and Dr Scotto di Vettimo, from the University of Exeter, found media scrutiny had been particularly responsive to deviations from the bank’s inflation target, increases in the unemployment rate, and higher levels of systemic financial stress.

They also noted, however, that sustained media scrutiny can be confined to periods of particular economic stress and that, in less turbulent times, there could be a gap in the sort of oversight needed to keep central banks “on their toes”.

They said: “Our findings suggest that media scrutiny works best in periods when it matters most from a constitutional perspective; that is, when the powers of central banks are expanded and/or their performance raises questions.

“On the other hand, they point to the limits of media scrutiny. Because of the incentives they face, the media seem less capable of exercising sustained oversight when central banks and their activities are not salient.

“Thus, there is a need for other account holding forums to keep an eye on central banks even when their activities are not newsworthy.

“Despite these limits, our results suggest that the media should be taken seriously in assessments of central bank accountability. Because of their influence on public perceptions and legislative oversight, the media are in a good position to keep independent central banks on their toes.”

Data for the study was gathered from almost 14,000 articles published by three UK newspapers - the Times, the Guardian, and the Daily Mail - over a period of more than 20 years.

Researchers found a marked increase in evaluative and negative coverage of inflation announcements from the Bank of England when levels under or over-shot the level set by the chancellor.

Levels of negative coverage towards the bank were also higher when the unemployment rate increased, when levels of systemic financial stress increased, and in months when the bank issued press released or delivered set-piece speeches.