‘Captured by crypto’: Fears grow over Farage’s threat to Bank of England independence – and the economy

A founding member of the Bank of England's interest-rate-setting committee has told the Nerve he would have "little or no confidence" in a governor of the Bank appointed by Reform UK, a party bankrolled by cryptocurrency billionaire Christopher Harborne.

Analysis by the Nerve reveals that – if Andy Burnham were to attempt to capitalise on the “Burnham bounce” and call, but lose, the early election some Labour figures are pressing for – an opportunity would open up for a victorious Reform government led by Nigel Farage to appoint a successor to current governor Andrew Bailey and make sweeping changes to the ranks of Bank policymakers. The party’s Treasury spokesperson, Robert Jenrick, detailed just such a strategy at Reform’s conference this week.

Willem Buiter, who served on the first monetary policy committee (MPC) when the Bank was granted independence by chancellor Gordon Brown in 1997, told the Nerve a Reform election victory could result in "large-scale donations from a major shareholder in a large financial institution potentially corrupting the appointment of a new governor". He adds that financial markets would "react quite violently" if legislation limiting the Bank's independence looked likely to pass.

Furthermore, Andrew Tyrie, a former chair of the Treasury select committee and a crossbench peer, has called on Burnham to amend legislation so that parliament and the committee would have the power of veto over any appointment to the governorship.

Farage has repeatedly attacked Bailey, condemning him as “useless, hopeless and failing” for his perceived attitude to Brexit and for the Bank’s “dinosaur” policies towards cryptocurrencies – the source of a substantial part of Harborne’s wealth. When directly challenged in an interview this year, Farage did not deny that he would try to cut an incumbent governor’s term short if he became PM.

At Reform’s conference this week, their Treasury spokesman Robert Jenrick went further and announced they had plans to reform the Bank – appointing “more people from the private sector” to key roles instead of “academic economists with less experience of the real economy” to encourage “greater diversity of thought” at what is a “closed institution”.

In his address to the conference today, Farage said: ”I said very clearly that financial circumstances would force Labour into a spring 2027 election, and you know what? I stand by that. I believe there will an election next spring.”

Some Labour veterans have been calling on Andy Burnham to call an early poll. This week, former home secretary Alan Johnson urged him to go to the polls in the summer of 2027, arguing that “he can't really, I don't think, see out the whole Starmer term”. Many others in the party are opposed, and Burnham is currently ruling it out, but Conservative leader Kemi Badenoch has written to the cabinet secretary asking for pre-election talks, and her shadow cabinet reshuffle was seen as preparation for a possible early poll. 

Bailey's term – which is non-renewable – expires on 15 March 2028. The latest possible date for the next general election is 15 August 2029. The Nerve's analysis of published Bank of England terms shows that in an early-election scenario – with a new government forming before August 2027 – all nine MPC seats would fall due inside a single parliament, including eight appointed by the government: the governorship, three deputy governorships, and four external members appointed directly by the chancellor. 

Sir Charlie Bean, a former deputy governor, shares Buiter's concern. He warns that a governor appointed under a political cloud would risk being "less trusted by the markets, the media and the public" and that "this could affect asset prices immediately". A third former MPC member, David Blanchflower, told the Nerve: "The independence of the Bank of England is a big deal."

Labour MP Phil Brickell, chair of the all-parliamentary group on anti-corruption and responsible tax, described why the politicisation of the governorship is of crucial importance to the public. “Politicians and their ideas come and go, but at the end of the day most people just want stability. Stability for their savings, their mortgages and their pensions. So people need to ask themselves whether Farage and his party, which has been captured wholesale by the crypto lobby, are going to do what is right for the vast majority of us, or what is right for their crypto paymasters.”

Lord Tyrie, who chaired the Treasury select committee (TSC) from 2010 to 2017, has now intervened, calling on Burnham, via the Nerve, to amend the Bank of England Act. He wants the new government to reinforce the independence and authority of the Bank by giving the TSC and parliament the power of veto over any appointment or dismissal of the governor. “The requirement for parliamentary approval bolsters the Bank's independence from government interference. After the next election this may turn out to matter a lot,” Tyrie said.

In January 2026, at the World Economic Forum in Davos, Farage sat down with Bloomberg's Stephanie Flanders and made his view of the Bank of England’s governor plain. "Andrew Bailey is a perfectly polite, nice man," he said, "but they should have picked somebody who was a Brexiteer to be in charge of the Bank of England and to think totally differently, especially around financial markets, financial market regulation."

Asked whether he would let a serving governor complete their full eight-year term – a convention that protects the Bank's independence from the electoral cycle – Farage declined to say he would. When Flanders put it to him directly – “You would suspend that because you'd want to have your own person in there” – he did not contradict her.

It was not the first time Farage had made his feelings about the Bank's leadership clear.

In May 2022, Farage called Bailey a "completely useless, hopeless and failing governor of the Bank of England" during an interview on GB News.

Last September, he and the former Reform chairman Zia Yusuf wrote a column in the Telegraph attacking the Bank's plan to cap individual stablecoin holdings at £20,000, calling the Bank's officials "dinosaur bureaucrats".

Later that month, Farage and his deputy, Richard Tice, met Bailey privately at Threadneedle Street. According to a summary of the meeting seen by Bloomberg, Farage raised the Bank's progress on a central bank digital currency – known as "Britcoin" – and pushed Bailey to take a bolder view on cryptocurrencies and private stablecoins. Exiting the meeting, Tice called it a "significant moment" and said Bailey was "keen to engage."

Farage later told a crypto conference he was "prepared to go to prison" to stop a Britcoin.

In June this year, the Bank announced it had abandoned its proposed £20,000 stablecoin cap. The following month, when challenged about this, Bailey said he was "able to spot" lobbying and knew how to discount it.

Reform UK is funded, to a degree without precedent in British politics, by a single donor: Harborne, a Thai-based cryptobillionaire whose fortune is bound up in Tether, the world's largest stablecoin issuer. The party has received around £15m from him since August 2025 – part of the £25m in donations Harborne has made to Farage's various political parties since 2019. 

In addition, in early 2024 Harborne gave Farage a £5m personal gift – a transaction now under investigation by the parliamentary commissioner for standards. 

While Farage has repeatedly said Harborne demands nothing in return for his donations, observers have noted that Farage's lobbying against both the stablecoin cap and the Britcoin matches the commercial interests of Tether and its shareholders. 

Reform did not respond to an approach for comment.

Harborne’s lawyers told the Nerve that any suggestion his “donations are in any way intended to influence, or connected to, the party's position on potential appointments to the Bank of England, the regulation of stablecoins, or any other matter of public policy …  lacks any factual or evidential basis and is denied.”

Sir Charlie Bean first raised concerns about the relationship of Harborne and Reform with the BBC, telling Faisal Islam that when donor funds come from major shareholders in large financial institutions, "there is a clear potential conflict of interest here, for example, in the appointment of a new Bank of England governor".

There was, Bean told the Nerve, no problem with politicians lobbying the governor – a governor simply has to be able to say no. "But clearly if a new governor has been appointed under the implicit understanding that he or she will favour particular interests, rather than the general good, then it becomes an issue."

Blanchflower and Buiter say they share Bean's concerns. Blanchflower says: "I totally agree with Charlie on a potential conflict of interest in the appointment of a new governor." 

While it would be near impossible for Reform to remove a sitting governor under the current Bank of England Act, Buiter noted that a government with a majority could simply amend the Act itself – altering the governor's term, or synchronising it with the electoral cycle – and such legislation could be applied even to a sitting governor.

"Markets almost surely would react quite violently if legislation limiting the operational independence of the BoE were likely to be passed and implemented," Buiter said. 

In October last year, Stefan Koopman, a senior strategist at the Dutch bank Rabobank, published an analysis warning that Farage's challenge to the Bank of England "isn't just opposition rhetoric" but "signals potential future policy". His conclusion: "If credibility in the UK's institutions erodes, even modest reforms can trigger outsized market reactions." 

Rob Wood, a former Bank of England economist now at Pantheon Macroeconomics, says a politicised appointment would push up the costs of government borrowing – costs that feed through to mortgage rates and the servicing of the national debt. It could also lead to higher inflation, the very thing the Bank’s independence is designed to prevent. When the Bank was granted independence in 1997, long-term gilt yields fell by some 2% – the sharpest fall since the 1960s, reflecting, as the Treasury’s Debt Management Office noted at the time, "market confidence that the government's decision to give interest-rate responsibility to the Bank of England would result in lower future inflation". Wood says a politicised appointment would  "reverse at least part of those falls". 

Not everyone shares these fears. Conservative MP John Glen, a former City minister and current member of the Treasury select committee, argues that the talent pool for the governorship is so small it constrains any government's choice. "It's very difficult to put somebody up who doesn't bear scrutiny," he says. "The credibility of the prime minister and the chancellor would be in play if they got somebody who wasn't serious."

But the parallels with the United States are not lost on former rate-setters. Blanchflower, who holds a US academic post, speculated as to whether Trump's new appointee to the Federal Reserve, Kevin Warsh, would prove to be a "poodle".

Trump spent years publicly attacking the previous Federal Reserve chair, Jerome Powell, signalled he would install a loyalist, and presided over legislation critics say the crypto industry effectively wrote. Farage's conduct toward Bailey follows a recognisable pattern: public disparagement of the incumbent, pressure on regulatory questions, a stated preference for a governor who thinks differently – all backed by unprecedented funding from the industry that stands to benefit.

It’s a scenario noted by Tyrie too: “We don't need to look into the crystal ball – we can read the book. Look at President Trump's shocking attempt to intimidate the last chairman of the Federal Reserve Board.” He fears it is part of a broader movement to undermine the economic system: “Pressure on central banks, not least from populists, will grow. It could compromise their crucial statutory responsibility for maintaining price stability.”

Brickell has similar concerns: “Farage is dangerous for economic stability and the integrity of our politics, and it is the responsibility of this Labour government to ensure both are diligently safeguarded.”

Tyrie, who chaired the TSC, the body that conducts pre-appointment hearings for senior Bank officials, told the Nerve he has long argued for stronger safeguards. He recalled how, in 2011, George Osborne conceded to the committee a veto over appointment – and dismissal – of the chair of the Office for Budget Responsibility, “but [Osborne] resisted the committee’s demand for similar treatment for the appointment of the governor of the Bank of England. That was a mistake.” (In an unforeseeable twist, Osborne now chairs the global advisory council of Coinbase, the world's largest crypto exchange.)

He says Burnham should correct that error. “The new government can and should act now to entrench central bank independence by amending the Bank of England Act. It should ensure that in future the appointment or dismissal of the governor is subject to approval of the Treasury select committee and parliament.

“A future governor's moral authority will be strengthened. Market confidence may increase. Democratic accountability certainly will,”  Tyrie said. “We should now do what George Osborne refused to do. Better late than never.” 

HM Treasury did not respond to an approach for comment.