Bank of England launches eavesdropping probe

The Bank of England launched a probe Thursday after discovering some investors eavesdropped on press briefings moments before they were broadcast, reportedly to hand a split-second advantage to high-speed traders.

The Times newspaper reported that one of the BoE’s suppliers had been sending a market-sensitive audio feed of the bank’s press conferences to hedge funds moments before the rest of the world.

The BoE, which will announce its latest interest rate decision at 1200 GMT, responded in a brief statement that it has identified the feed that had been misused by a third-party supplier -- and whose access had now been revoked.

“Following concerns raised with the bank, we have recently identified that an audio feed of certain of the bank press conferences -- installed only to act as a back-up in case the video feed failed -- has been misused by a third party supplier to the bank since earlier this year to supply services to other external clients,” the bank said overnight.

The video feed of the bank’s press conferences has a slight delay, while the audio feed was live.

At press conferences following monetary policy decisions the BoE’s governor makes comments on policy, some of which can produce considerable swings in the value of the pound. Even several seconds advantage could give traders the possibility to earn considerable returns.

“This wholly unacceptable use of the audio feed was without the bank’s knowledge or consent, and is being investigated further,” added the BoE.

“On identifying this, the bank immediately disabled the third party supplier’s access.

“As a result, the third party supplier did not have any access to the most recent press conference and will no longer play any part in any of the bank’s future press conferences.” A spokesman for Britain’s Financial Conduct Authority regulator meanwhile told AFP that it was  “looking at the issue” but declined to make further comment.

The BoE will meanwhile reveal Thursday its first interest rate call since Prime Minister Boris Johnson’s landslide election victory one week ago, and ahead of Brexit next month.

The bank is expected to keep its key lending rate at 0.75 percent, as speculation also swirls over an imminent appointment of the successor to departing Governor Mark Carney.