Simon English: Want to see a real crisis? Just show Governor Mark Carney the door

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This is a very strange country, Sven-Goran Eriksson once remarked, amazed at the extraordinary interest taken in his admittedly curious love life.

The former England football manager may not have much in common with Mark Carney, but he and the Bank of England Governor could compare notes and at least agree on that one.

Like the England football manager, every word the Governor utters is hung onto, pored over and invested with far more meaning than it can reasonably bear.

If Carney remarks that his cornflakes were soggy, well, that must mean he’s pondering a shift in monetary policy.

There are many reasons why this is so, but the main one is this: lots of people make a living from interpreting what the Governor (and the England football manager) really mean. As such, their living would clearly be in jeopardy if they merely reported that he said pretty much as he had said 10 times before, and meant it each time.

I once asked Carney if he didn’t find it annoying that every time he used a slightly different sentence to say the same thing, two hundred people went completely nuts. He rolled his eyes, and replied: “I wish it were only two hundred.”

The mean-spirited City contingent that never liked the idea of having a foreigner in charge of the Bank in the first place lately scent blood. By inventing a split between him and Prime Minister Theresa May, they can fantasize that he’s on his way after just three years.

The “split” comes down to this: she said in a speech that quantitative easing wasn’t all good. Commentators decided she intends to take charge of monetary policy, wrecking the Bank of England’s independence — a huge leap from what she said, to be sure.

Carney said this would be a bad idea whether she had ever had it or not, and that he wouldn’t “take instruction” from politicians.

Yesterday, Treasury officials had to brief the Financial Times to carry a story calming “speculation” about “tensions” between the two of them.

“May allies seek to reassure Carney” ran the headline, assuming that he’s a man much in need of reassuring.

One hopes May and Carney had spoken to each other long before the FT got it together to interpret the pair of them to each other in soothing ways.

The supposed reason, as opposed to the invented ones, for the City anger at him largely comes to this: he said several times in the last two years that he was moving towards putting interest rates up, but instead they’ve actually gone down a bit — the hypocritical, flip-flopping Carney Chameleon that he is.

Even non-economists might note that quite a lot has changed along the way, which is why his guidance on rates had to.

He’s not claiming — unlike City forecasters, laughably — to see the future with crystal clarity, he’s just giving a view of his state of mind on the basis of what he knows now. If the news changes, so might his view.

Jacob Rees-Mogg MP — if you want opinions, he has them — reckons Carney has so compromised his independence by daring to say honestly that he thought Brexit would be bad for the economy that he simply has no credibility.

It is difficult to escape the conclusion that those chuntering that Carney should go are mad. We all like a bit of anarchy, a bit of chaos, as the Brexit vote demonstrates. But there are limits.

If you think the pound is wobbly now, try binning the boss of the Bank of England for no good reason and see what a currency crisis really looks like.

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October 18, 2016 |
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