You can’t make good communications out of bad policy is a truism many readers of this blog will relate to. Lee Cain, former chief spin doctor to Boris Johnson, used it to describe the challenges of communicating through the pandemic while politicians made policy on the hoof. It neatly explains how communication of a policy is seldom more important than its detail.
The tightrope central banks around the world are walking over the timing and size of interest rate rises is a rare exception. The economic impact of a rise of 15 basis points in interest rates – from 0.1 to 0.25 per cent – which was mooted by the market as a potential outcome of the Bank of England’s rate setting committee this week is arguably less important than the messaging that surrounds the decision. Language and tone set expectations on the direction of travel much more meaningfully than the decision alone.
In the lead up to this week’s rate decision, the Bank was hawkish. They signalled they would “have to act” in the face of inflation, which the Old Lady has warned will climb to five per cent by spring.
When the Bank then demurred from rising rates and expanded monetary easing still further, reality did not meet market expectations. Significantly, the backlash did not focus on policy detail so much as the credibility of the Bank’s leadership and their stated determination to tackle rising inflation. In short, it swiftly became an issue of trust and confidence.
For communicators, this is both terrifying and reassuring. Terrifying because on the occasions where communications is more important than policy, every utterance builds or damages credibility. No word can be out of place or imprecise.
Central bank independence means that their communicators and spokespeople have among the most exacting roles in our industry. In my own experience, managing communications around the Birmingham prison riot in 2017 and coordinating national police communications during the 2011 riots, are two occasions when I knew that every word would impact public confidence in the respective services. While we thrive on the pressure, we also know that on those days, our words can change the course of events as reporting unfolds. We’re also at risk from over-communicating. One reason the Bank’s credibility is now under such scrutiny is because Governor Andrew Bailey has perhaps been over-chatty in recent weeks and is now course-correcting.
We can be reassured though that these occasions are, however, very rare. They should be. Business decisions come first. Ordinarily, communications are an enabler which change behaviour, attitudes and beliefs that drive the policy or commercial outcomes required. So, the next time a business or political leader blames a policy going wrong on the way it was communicated, take a deep breath. “Poor communication” is often a symptom of a different problem.