The independence of central banks, often considered a cornerstone of modern economic stability, is facing renewed scrutiny and tension on both sides of the Atlantic. On November 13, 2025, Bank of England policymaker Megan Greene sounded a warning that political pressure on the Federal Reserve’s autonomy in the United States could have ripple effects in the United Kingdom, potentially challenging the long-held principle that monetary policy should be insulated from day-to-day political machinations.
Greene’s remarks come at a time when the political climate in both the US and UK is charged, and the actions—and even the job security—of central bank leaders are being openly discussed by high-profile politicians. During a panel discussion on Thursday, Greene highlighted the growing risks, noting, "The question of central bank independence is certainly something that comes up in the UK." Her comments were prompted in part by recent statements from British populist leader Nigel Farage, who has publicly touted the idea of replacing the Bank of England governor should he come to power.
Farage’s rhetoric marks a significant departure from the UK’s traditional respect for the independence of the Bank of England, which has been a hallmark of British economic policy since the late 1990s. The mere suggestion of replacing the governor for political reasons raises concerns among economists and policymakers about the precedent it could set. Greene was unequivocal in her assessment, stating that the UK should not "ignore" the repeated attempts by US President Donald Trump to apply pressure on Federal Reserve Governor Jerome Powell. According to Greene, these actions in the US could embolden similar moves in Britain, threatening the delicate balance that allows central banks to make sometimes unpopular decisions in the interest of long-term economic health.
Across the Atlantic, the Federal Reserve is grappling with its own set of challenges. Just a day before Greene’s warning, on November 12, 2025, two influential Federal Reserve officials—Susan Collins, president of the Federal Reserve Bank of Boston, and Raphael Bostic, president of the Atlanta Fed—publicly expressed their opposition to another interest rate cut at the central bank’s next meeting in December. Their stance signals a potential shift in the central bank’s approach, as the rate-setting committee had previously been expected to implement a third straight cut next month.
According to The New York Times, the remarks by Collins and Bostic have "further muddied the outlook for the Fed’s next steps," as investors and analysts attempt to gauge whether the central bank will continue its recent trend of rate reductions. The Federal Reserve’s decisions are closely watched not only for their impact on the US economy—affecting everything from mortgage rates to global capital flows—but also for the signals they send about the central bank’s independence from political influence.
The tension between political leaders and central banks is not new, but it has intensified in recent years as economic uncertainties and populist movements have gained traction. President Trump’s repeated public criticisms of Jerome Powell, and his calls for looser monetary policy, have raised eyebrows among economists who warn that such interventions can undermine market confidence and the credibility of central banks. Greene’s warning that the UK should pay close attention to these developments reflects a broader concern among policymakers that the erosion of central bank independence in one major economy could have far-reaching consequences elsewhere.
For decades, central bank independence has been viewed as essential for keeping inflation in check and maintaining financial stability. The logic is straightforward: if politicians can dictate monetary policy, they may be tempted to keep interest rates artificially low to boost growth ahead of elections, at the risk of fueling inflation or asset bubbles. By contrast, an independent central bank can take a longer-term view, raising rates when necessary even if it causes short-term pain for borrowers or the government’s popularity.
Yet, as Greene noted, this principle is increasingly coming under fire. The rise of populist leaders like Farage in the UK and the assertive stance of President Trump in the US have brought the issue into sharper focus. Farage’s suggestion that he would replace the Bank of England governor if given the chance is, to some observers, a direct challenge to the institution’s autonomy. While such a move would be unprecedented in recent British history, the fact that it is being discussed at all has prompted serious debate within policy circles.
Meanwhile, the Federal Reserve’s internal debates over interest rates reflect the complexity of its mandate. With inflation, employment, and financial stability all weighing on the committee’s decisions, officials like Collins and Bostic must weigh the risks of cutting rates too aggressively against the dangers of tightening policy prematurely. Their recent opposition to another rate cut suggests a growing caution within the central bank, even as external political pressures mount.
According to Reuters, the remarks from Collins and Bostic may indicate that the Federal Reserve’s rate-setting committee "could be tilting against what had been an expected third straight cut next month." This uncertainty has left markets and analysts guessing, and it underscores the importance of clear communication from central banks at times of heightened political scrutiny.
It’s not just the US and UK that are grappling with these issues. Around the world, central banks in countries from Turkey to India have faced political pressure to loosen policy, sometimes at the expense of their credibility. The global nature of capital markets means that a loss of confidence in one major central bank can have knock-on effects elsewhere, as investors reassess risks and adjust their portfolios accordingly.
Back in the UK, Greene’s comments serve as a timely reminder of the stakes involved. "The question of central bank independence is certainly something that comes up," she said, emphasizing that the UK must remain vigilant in defending the autonomy of its institutions. Her warning that the UK should not "ignore" the example set by President Trump’s pressure on Powell is a call to action for policymakers, economists, and the public alike.
As the debate over central bank independence intensifies, both the Federal Reserve and the Bank of England find themselves at a crossroads. Will they be able to maintain the trust and autonomy that have underpinned their success for decades, or will political pressures erode their ability to act in the best interests of the economy? The coming months may provide some answers, but for now, the question remains open—and the stakes could hardly be higher.