Why should we believe Mr Carney on Brexit?

Mr Carney gave unfortunate testimony to the Treasury Committee yesterday, which has been spun as helpful to the Better Stay in Europe campaign because he did not set out the pluses of leaving as well as he could.

Mr Carney of course now has a UK track record of making inaccurate or unhelpful forecasts. Throughout his time as Governor he has not used his main power, the power with the MPC to shift interest rates. When he first arrived he introduced forward guidance. He told us interest rates would not go up before unemployment fell below 7% but implied they might after that.

When unemployment fell below 7% he gave different guidance on raising rates. He said he would look instead at wages, spare capacity and productivity to decide when to put up rates. Unemployment was clearly no longer a guide to capacity or inflationary pressures.

When real wages and productivity started rising and more growth occurred, he then said in the summer of 2015 the decision on raising rates would “would come into sharper relief” at the turn of 2016.

When 2016 turned there was another change of tack. We were told that growth was lower so there would be no rate rise.

Markets, who had expected interest rates to be at 2% by 2017, have adjusted to rates still being at 0.5% in March 2016, with no immediate impulse from the Bank to raise them.

I set this all out now because it serves to remind us how Mr Carney has so far been unable to issue decisive guidance or to estimate the likely path of inflation, growth and money accurately. It should lead all to ask why then should we think his views on Brexit any better informed?

The Bank he represents has a long history of catastrophic misjudgement on the UK economy prior to his arrival. This is the Bank that recommended entry into the European Exchange Rate Mechanism, which first created a bad inflation, and then a nasty recession. This is the Bank that presided over the credit crunch and did not use its facilities to keep solvent banks sufficiently liquid at the height of the crisis. In both cases the Bank ignored advice from those of us who thought the ERM would do damage, and who thought the Bank should lend short term to commercial banks in need whilst at the same time working behind the scenes as one of their regulators to get them to strengthen their balance sheets.


  1. The Active Citizen
    March 9, 2016

    Well said, JR. Carney clearly demonstrated establishment pro-EU bias.

    Funnily enough my latest ‘EU Summary’ is related to what you wrote.

    EU Summaries For Normal People
    No. 12 – The EU And Who To Believe

    One side says this, the other side says that. Who can you believe when it comes to the two sides of the EU debate?

    1. Broadly-speaking, the larger the organisation talking, the more they’ll be for Remain. However the ordinary British people don’t always like being told what to do, particularly if they don’t think it’s in the best interests of ‘normal people’ like them.

    2. Leaders of large organisations feel at home with the EU. They’re used to huge bureaucracies, lots of rules, chiefs being appointed not elected, the idea that they know best. They dislike change and they like central control.

    3. Does the following sound familiar? “The price we would pay in lost investment and jobs in Britain would be incalculable.” “our own non-membership … is threatening great swathes of British manufacturing industry.” That was Lords Mandelson and Heseltine trying to persuade us to join the Euro over 20 years ago. Today, no-one believes we should give up the Pound – the Eurozone has been a disaster and no-one now proposes joining it.

    4. Interestingly, the same people who told us we had to join the Eurozone now tell us to remain in the EU: Most Ministers, the CBI, Big Business, the Banks, the Civil Service, the BBC, academics, the Bank of England, major Charities, the Trades Unions, the Financial Times, Peter Mandelson, Tony Blair, Richard Branson, Michael Heseltine, Ken Clarke… and of course the EU itself.

    The elites were wrong about the disastrous Euro. So why should they be right about ‘Remain’?

    The Establishment Loves the EU. Normal People Will Vote For Their Own Best Interests.

    1. Lifelogic
      March 9, 2016

      Indeed these people were wrong over the EURO, the ERM, the catastrophic warming religion, the price/scarcity of fossil fuels, the renewable energy nonsense, the tax increases producing far less tax revenue and killing growth, the duff rescue structures for the banks, the regulation of the banks, the QE, the lack of new runways, the scale of EU immigration, the damaging over regulation of employment and indeed almost everything else.

      Why trust them now. Why do the BBC keep inviting these proven wrong/disasters on to the air to give us their latest duff guidance?

    2. oldtimer
      March 9, 2016

      Adam Smith wrote (Wealth of Nations 1776) “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

      If he were alive today I think he would want to add “…or to eliminate competition, or mould the public to their version of correct thought and behaviour” for such is the influence of the EU, their sock puppet charities and big corporates.

      1. Lifelogic
        March 9, 2016

        “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

        This seems to be particularly applicable to bureaucrats, lawyer and politicians even more than it does to other trades. Worse still many of the larger businesses can employ political “consultants” to slope the pitch or even divert tax payers money straight into their pockets, as with all the absurd CAP, “green” subsidies., regulations on vacuum cleaners, toasters and endless similar nonsense.

    3. John Bracewell
      March 9, 2016

      The Active Citizen.
      ‘Leaders of large organisations feel at home with the EU. They’re used to huge bureaucracies, lots of rules, chiefs being appointed not elected, the idea that they know best. They dislike change and they like central control.’

      In addition to your assessment above, the establishment elite like the EU for reasons which include:
      1. Personal financial gain – either through EU sponsorship for the large organisations they work for and the knock on effect of that personally or in the case of politicians, for some, like Clegg, the Kinnocks and Mandelson, who have already gained financially from the EU or other hopefuls ( e.g. S left out ed)who still harbour EU Presidential hopes and the vast financial gain attached with that.
      2. For mainly politicians, but also some other establishment figures, the EU presents a convenient screen to hide behind. We have all heard the arguments ‘that we would love to be able to do such and such but the EU rules will not allow us’. Why anyone should aspire to high office in the UK and then give away power to the EU or hide behind the power of the EU, is very disappointing. What we need are leaders who really believe in the UK’s ability to govern itself and who wish to take full control of the levers of government.

  2. Lifelogic
    March 9, 2016

    Indeed there clearly are many advantages for the City through being outside of the EU he mentioned non of them. As you correctly point out the record of the Bank of England in recent years is dire. From John Major’s ERM fiasco to the banking collapse to the current attacks on savers.

    There is a huge lack of any meaningful competition in the banking sector. How can it be that they can take unsecured deposits and pay virtually nothing on them, yet lend out (often to better credit risks than themselves and well secured) at rates like that can be 10 times the rate they are paying out on deposits. If that is not a clear sign of a lack real competition in the market then what is? Why does the BoE and the competition authority never address this and bring in more real competition?

    The damage done by the bank withdrawing lending from sound real businesses after the crash (the government owned RBS in particular). The BoE and Gordon Brown’s rescued the banks, who then merely over charged, called in loans (or worse mugged) real businesses to rebuild their balance sheets. This was hugely incompetent and damaged jobs, tax receipts and the real economy hugely. It was the banks customer who deserved government support not the incompetent bankers and bank regulators who caused the problems.

    1. Lifelogic
      March 9, 2016

      Mr Carney has been a very poor choice indeed for the BoE and hugely over paid too. Interestingly his thesis for his DPhil was apparently entitled, “The Dynamic Advantage of Competition” – one wonders why he fails so lamentably in this area now.

      Perhaps like so many at Oxford he just did not understand what he was studying, or perhaps he has just forgotten it all. Oxford (and academia in general) seems to be awash with economists and economic lecturers who simply do not understand economics. People who just cannot see the wood for the trees like Cameron.

      He should go and take his PPE / Eco-warrior wife with him.

      1. Mark B
        March 9, 2016

        Mr. Carney and Mr. Dragy (sp) the Governor / President of the ECB both have one thing in common when it comes to their respective employment histories. In fact, many of today’s head government finance chief’s came through the same employer.

        Can you guess who ?

        1. Mark B
          March 9, 2016

          Whoops !

          Sorry. good morning.

        2. Denis Cooper
          March 9, 2016

          Etymologically, is it anything to do with a precious metal and bags?

        3. stred
          March 9, 2016

          Further clue. PM of Australia who replaced previous unreliable one also director. Big in carbon trading. Big player in banking crash. Supports and finances Stay campaign.

          Prize: free subscription to John Redwood Diary for one month.

          1. Colin Hart
            March 9, 2016

            Could it be the same bank that once employed Lord ‘Northern Powerhouse’ O’Neill?

      2. bigneil
        March 9, 2016

        ” see the wood for the trees like Cameron” – thanks for putting a smile on my face. The omission of one comma, after the word trees, completely alters the way the sentence could be taken. Maybe it was intentional, maybe not.

        1. stred
          March 9, 2016

          I missed a comma before ‘also’ too.

      3. bluedog
        March 9, 2016

        One could forgiven for thinking that PPE today is no more than an induction course for the teachings of the Frankfurt School. Cameron certainly gives that impression.

    2. Lifelogic
      March 9, 2016

      Cameron and Osborne have an appalling record of selecting sound people for senior positions or as A lister candidates – with his token women/minorities and celebs approach. Tinsel over substance every single time.

      Think of Huhne, Davey, Rudd, Soubry, Cable, Osborne himself, Morgan, Baroness Warsi, Truss, Ken Clarke, Greg Clarke, Halfon, Hammond, May, Letwin, Fallon, Hesseltine, Carney, Feldman, Lord Patton……..

      1. Lifelogic
        March 9, 2016

        Or even his tax payer funding of Camila Batmanghelidjh.

        He simply seems totally unable to separate the wheat from the chaff, the substance from the fake tinsel, the greencrap from the real science and engineering, the tax borrow and waste merchants from efficient smaller state people, the PR spin and photo ops from the substance of what actually works.

        Even when this is blindingly obvious to anyone remotely sensible.

      2. alan jutson
        March 9, 2016


        “Cameron and Osbourne have an appalling record of selecting sound people…..”

        Sums up perfectly why the coalition and this government have been so poor.

        Couple that with any real lack of proper business experience, and a rather privileged background which was financially very secure, and you can perhaps understand the reason for so many errors.

        They simply do not seem able to understand the very different priorities, finance, way of life, or the human nature of the vast number of citizens for whom they are making decisions.

        1. Lifelogic
          March 9, 2016

          Indeed a lack on empathy and any real understanding of the average joe or human nature ingeneral. I will try hard to ensure that my children do not develop this silver spoon, libdim, magic money tree, green crap, view of the world.

      3. Colin Hart
        March 9, 2016

        Not to mention Coulson…and he was warned.

    3. Lifelogic
      March 9, 2016

      Cameron just now in the house, claimed:- he was cutting the taxes people pay.

      Did he actually read the last few budgets? They increased the tax rates hugely? Doubtless given the governments endless waste (and the low tax receipts) we will get yet more of this next week from (the IHT ratting, stamp duty increasing, pension mugging, landlord mugging, child benefit grabbing, personal allowance grabbing, probate tax increasing, dividend tax introducing, SDLT tax increasing, IPT increasing ……) George Osborne.

      Is Cameron
      A. a blatant liar or
      B just completely ignorant of the changes being made to the tax system
      C Totally deluded?

      He then claimed that the cheap flight are due to the EU! Clearly complete and utter drivel as usually is the best he can do. Cheap flights are due to more competition, supply and demand, better engineered aircraft and cheaper fuel. They do not just go to he EU.

      Furthermore they would be cheaper still without Osborne Air Passenger Duty and if we had more runways at Heathwick.

      I see that fuel taxes on petrol and diesel are now 74% of the retail price. The highest proportion it has ever been apparently. Will Osborne increase it still further next week?

    4. Lifelogic
      March 9, 2016

      It seem Buckingham palace have registered a press complaint about the Sun reports today.


      But do they deny the truth of the report? I think Clegg just says he has no recollection.

      The Queen always seems fairly sensible to me, so she is highly likely to support a Brexit, though she is sensible enough (unlike her son) to keep her political views private.

      1. bluedog
        March 9, 2016

        It would be remarkable if the Queen did not support Brexit.

        Her job depends on it!

  3. Margaret
    March 9, 2016

    But he probably is correct on one thing. I cannot imagine how a Brexit would not cause some sort of instability. Change always causes areas of dynamism and areas of flux where methods and mind sets are required to be rethought. This can be harnessed as well as be a problem depending upon how it is managed.

    1. Lifelogic
      March 9, 2016

      Remain will cause instability too. There will be little that is stable about the EU after a remain vote. As they career towards an anti-democratic single state and as the EURO structures and migration problems inflict further damage all over the place.

    2. Mark B
      March 9, 2016


      When you hear the fire alarm bell / sounder, what do you do ?

      Do you immediately get up and head for the nearest exit or, wait for others to lead the way ?

      One has the risk of looking foolish if it is a false alarm, and the other may well save your life.

      Me, unless I know it’s a test, I get up and go !

      My point being, I am ready to put aside all everything else to ensure my personal safety. Whatever the risks to leaving they pale into insignificance to those that would encourage me to remain.

      1. Lifelogic
        March 9, 2016

        I always assume it is another endless test as dictated by the hugely over the top health and safety rules. Unless I can see or smell smoke that is or perhaps if I was very high up in a tower block. This ways about 999,999 times in 1000,000 I am right.

        I might just look round for a safe escape route though.

        1. Bob
          March 9, 2016

          “another endless test as dictated by the hugely over the top health and safety rules.”

          Or one of the guests at the breakfast buffet has placed a croissant in the toasting machine.

          1. Lifelogic
            March 10, 2016

            Or a dirty diesel bus has passed close to the open window or a spider got in to the detectors.

      2. Paul Cohen
        March 9, 2016

        Perfect metaphor!

      3. margaret
        March 9, 2016

        In a fire we have safety instructions in order that panic will not ensue and as I have commented previously it will be a matter of how it is managed.

      4. Bob
        March 9, 2016

        @Mark B

        “When you hear the fire alarm bell”

        Problem is that the hard of hearing cannot hear the alarm.
        The first they’ll know of the problem is when they smell burning.

    3. Anonymous
      March 9, 2016

      Remain will cause instability too.

      The whole question of Brexit is because the EU is a disaster. If it wasn’t then we wouldn’t even be considering it.

    4. DaveM
      March 9, 2016

      “I cannot imagine how a Brexit would not cause some sort of instability.”

      Sensible and wise words as always Margaret, and obviously referring to the £ and the economy in general.

      However, is this instability going to be worse or better than the Euro’s instability, social and cultural instability, instability caused by the bungling EU “play at being statesmen in Ukraine” fools, and so on?

      If we vote to remain, does that mean we’ll enjoy the kind of EU-sponsored (and generated) stability they’re currently enjoying in Greece, the Balkans, Austria, Slovakia, Poland, Germany, Sweden, and France?

      1. Mitchel
        March 9, 2016

        @DaveM,you mention Ukraine,I wonder if the EU has contingency plans for the blowback from that country’s demise.There is a very interesting article on the Guardian website today -“Why Ukraine needs Russia more than ever”,written by Professor Nicolai Petro of the University of Rhode Island,detailing just how close to total economic collapse it is.The Russian position seems to be : you broke it,you pay for it.

      2. John Bracewell
        March 9, 2016

        All the risks of Remaining in the EU, that you detail, will be magnified for the UK after a Remain vote since the EU will have captured its most outspoken critic and will feel emboldened to continue with its ‘ever closer political union’ which will be foisted on the UK regardless of the so-called opt out of Cameron’s negotiations.

    5. Hope
      March 9, 2016

      JR is correct. Carney has so far always deployed a flawed judgment on all his predictions. Therefore I would not place any credibility on what he says. He clearly is in the pocket of Osborne.

      What is worrying, JR, is the article in the mail about Longforth and claims that No 10, through aids, are making veiled threats about contracts and honours to those who voice Brexit. Is this not corruption? It is also stated MPs should think twice before discrediting Cameron’s failure of a deal. Cameron claimed collective responsibility was suspended, therefore there cannot be a government position, as pointed out by Kate Hoey MP. He pompously thinks he and the government are one and the same thing. Cameron’s behaviour is unacceptable. Last week he threatened us with his own incompetence over immigration, stood silently by smiling when a foreign leader made veiled threats to the nation. This week in stark contrast his makes claims of rock solid policy on asylum, yet stupidly gives away hundreds of millions of our taxes to Turkey when he does not have to!

    6. Know-dice
      March 9, 2016

      Sometimes in order to move forward you need to take a step back and the longer you leave it, the bigger step back you need to take.

      Our time has come to take a step back before we can move onwards and upwards…

      At the moment it is a small step (if any at all), leave it any longer and that step will only become larger and more disruptive.

    7. Mike Stallard
      March 9, 2016

      There is a good way to avoid uncertainty.
      If we apply temporarily for membership of the Common Market (EEA) and also join EFTA, then everyone knows where we stand during the negotiations. Trade would not be interrupted.
      The EU knows about us and the Spinelli Group has talked about Associate Membership anyway.
      There is no need at all for any disruption or uncertainty.

    8. Pericles Xanthippou
      March 9, 2016

      The Governor said inter alia that the Bank had a number of monetary tools that could be used ‘to calm markets in the event of an exit’. My own view is that he ought to have made clear that, as Margaret says, the markets might be just as much troubled by victory of the E.U. side; he’d have done something to allay the inference of his own and the Bank’s bias by so doing. (To be fair: he did point out the risk associated with the U.K.’s being tied to the European ship as she tried to deal with the “unfinished business of European monetary union”.)

      Markets dislike three things: (1) change; (2) a lack of change; (3) uncertainty. I ought perhaps to have said four things: (4) anything else. No matter what the outcome of the plebiscite, stock markets and currency and commodity exchanges can be expected to bounce around much as they have done for the last year or so, since the fools realized that China’s economy cannot simply go on growing just because the World’s population is growing out of control and needs it to!


    9. Denis Cooper
      March 9, 2016

      There was a newspaper article recently saying that half of all workers are thinking of changing their jobs within the next year. There’s a lot of flux, much more than there used to be, and any adjustments needed post-Brexit would just be part of that.

  4. Mick
    March 9, 2016

    The time as come Mr Redwood to start fighting dirty because it’s not stopping the outers after yesterday’s performance from Mr Carney and it’s going to get bloodier, this is going to be like the 17th civil war but without people being killed , the outers are going to stop at nothing to con the public to vote to stay in the dreaded eu, we are going to have one shot at it so let’s go for it and take no prisoners

    1. Mike Stallard
      March 9, 2016

      I bet this isn’t moderated out!

    2. Lifelogic
      March 9, 2016

      It will certainly get bloodier as the leave side gains in the polls. I will be very surprised if the leave side does not win.

      It is in almost no ones interest to vote remain in the first referendum.

      Cameron has as usual backed the wrong horse.

      I see some dopes are trying to make sure the billions of asset invested in shop space and stock go to waste for much of Sundays. Thus pushing up prices for everyone.

      More drivel on the non existent gender pay gap/discrimination yesterday or Woman’s day all over the BBC. Women aged 22-29, women earn an average of £1,111 more than men already. Then some choose not to for understandable work life balance reasons.

      1. Narrow Shoulders
        March 9, 2016

        I recall that you backed the Conservatives to lose the last election heavily so forgive me if your predictions of leave winning do not fill me with optimism.

  5. Mike Stallard
    March 9, 2016

    About lending rates:
    What relation has the lending rate to government bonds?
    I wonder how much the massive and blossoming national debt, which at some point has to be honoured, is to blame for the constantly low interest rate?
    I wonder how much No 10 where local government resides now has lent on the Governor of the Bank of England to keep the rates low for that reason?

  6. Anonymous
    March 9, 2016

    The problem is the BBC.

    It reports Mr Carney as ‘well balanced’ and Eurosceptics as ‘unhinged’ (with raised eyebrows at the end of a news item.)

    1. Anonymous
      March 9, 2016

      One wonders if newsreaders are being told to do this.

      1. Lifelogic
        March 9, 2016

        I am not sure if they are commanded, or they only recruit the dimmer Libdim art graduates or they have a brain washing machine somewhere in Television House.

        But to a man or woman they are like the EU, magic money tree economics, higher taxes, more immigration, more diversity, higher taxes, higher benefits, more regulation, bikes not cars, trains not trucks or planes, green crap energy and the rest of the Libdim drivel.

        1. Know-dice
          March 9, 2016

          If you go to any TV news room you will quickly realise that they are in a “bubble” of their own creation, the same as most Westminster politicians (with of course a few notable exceptions…).

          They don’t want to just report the news as it happens they want to create it, with of course their own spin.

        2. Lifelogic
          March 9, 2016

          sorry – all appear to like the EU ….

        3. Alan
          March 9, 2016

          But Boris rides a bike and Nigel Farrage uses trains.

          1. Lifelogic
            March 9, 2016

            Boris is rather brave (or fool hardy) in London traffic anyway. He never look as though he actually in control either. I think Nigel lives in Kent so trains are all almost the only option, given that all the roads are being blocked with red lights, bus lanes, islands, bike supper highways, “environmental” areas, bike lanes, anti car red lights and a lack of any real investment for years.

      2. Bob
        March 9, 2016

        As I mentioned further down the thread, BBC editorial directors have been invited to lavish pro EU dinners at the German Embassy in London.

        1. Lifelogic
          March 9, 2016

          I hope they enjoy their sauerkraut, frankfurters, black forest gateaux, and liebfraumilch.

        2. A different Simon
          March 9, 2016

          If we actually had patriotic MP’s in Westminster instead of a nest of fifth columnists they would dealt with the scandal which is the BBC a long time ago .

          They should never have let a publicly funded broadcaster take funds from a foreign power .

          Just another example of the treason perpetrated by LibLabCon .

          1. Lifelogic
            March 10, 2016


      3. oldtimer
        March 9, 2016

        Yes they are. When the BBC decides, or is told, to take a line it is all hands to the pump.

        The Heads of all the main departments, be it News, Drama, Comedy, Documentary or whatever are brought together and told the line they must take. This ensures selective choice of topics, selective choice of who to interview, selective questioning techniques, selective commissioning of artists and writers and selective programming to ensure that the line is relentlessly followed. We have seen this with the promotion of global warming (since c 2006), vegetarianism and anti meat eating, feminism and the EU to name but five examples that can be heard every day.

        1. Lifelogic
          March 9, 2016

          The view of the interviewers come out in every question they ask and indeed in the whole way they pre frame the discussions or debates.

      4. Denis Cooper
        March 9, 2016

        Of course, see the Daily Mail article I have linked above.

        This is not a game, it is a fight to determine the destiny of our country, and we should not assume that it will be a fair fight and we should not expect the Remainders to have the slightest scruples about what they do to try to win the referendum.


        “When it becomes serious, you have to lie.”

  7. Antisthenes
    March 9, 2016

    Although we know little will change the day after we vote leave if we do and that there will be transitional period between the vote and the final split from the EU many do not or cannot comprehend what it all means. So Mr Carney is probably right there will be some panic and destabilisation in the short term as there will be uncertainty about what final deal with be made and how it effects certain groups and individuals. How bad it is will depend on government. The way it acts will be crucial after the vote it will either calm the situation or exacerbate it. The doom sayers will have to be kept in check and muted.

    He did say that it is likely the UK would eventually have a bright future outside of the EU but he was not sure and to be honest no one can be sure. Predicting the future is notoriously difficult. We leavers have balanced the advantages and disadvantages of staying in the EU not just the the economic ones but political, social and others as well and have decided the advantages fall well short. We accept that there is a price to pay in leaving but the costs of staying in is even greater. The short sharp pain will be worth the gain the alternative we believe will be to have constant bouts of pain without much relief from it.

    The key is in how we manage the exit and to do that we will need far more truth about the real consequences of Brexit than we have had to date. The Brexit plan ideally should be available for scrutiny now and be subject to revision so that all will know what to expect and can contribute to it. Knowledge is the great calmer it is the unknown we fear. Those who would sabotage the exit will have to be restrained of course as they will be up to all sorts of mischief.

  8. agricola
    March 9, 2016

    I do not pretend to be well versed in national economics, I think I would have led a disappointed life had I been. I have an instinct to smell a rat when I catch glimpse of it’s tail however.

    The government over many years has borrowed vast sums of money, printed vast sums of money, all of which has to be paid for. One aspect of payment is interest. By ensuring that the bank lending rate is rock bottom, government can fund it’s profligacy for very little. Call me cynical but that is what I think is at the heart of it.

    Meanwhile, hard working Joe Public enjoys no such advantage. He gets next to nothing for what he might have saved, but if he wishes to borrow for very viable projects it costs him in interest way more than government pay. Additionally should he wish to borrow to overcome a temporary setback it costs him an arm and a leg plus some.

    My conclusion is that the country is not being run for the benefit of the people, they are there to enrich the few.

    1. A different Simon
      March 9, 2016

      “The government over many years has borrowed vast sums of money, printed vast sums of money, all of which has to be paid for.”

      No . A sovereign country can print to extinguish all debts denominated in it’s own currency .

      If we had moved to the Euro , we would no longer have that option .

  9. The PrangWizard
    March 9, 2016

    There was emphasis on ‘risk’, as with all spin on the subject of Brexit. They turn it to sound as if that it is a danger in itself and is bound to lead to problems which we won’t be able to control. Project Fear again.

    And they don’t use the word risk when referring to staying in. It’s not by mistake. We know what the problems of being in are, we suffer from them every day and we can actually see them getting worse. And they are certainly not in our control, but we hear lies about that.

    We must Leave the EU.

  10. alan jutson
    March 9, 2016


    Have long since given up on expecting any sort of balanced comment from what are now regarded as the establishment.

    Cameron and his supporters are now so out of touch, and spinning so fast, I tend to either change channel or walk out of the room when they are pontificating.

    Most of my news now comes from the web, as so called soft interviewers seem to abound when interviewing BSE supporters for the traditional main media outlets.

  11. eeyore
    March 9, 2016

    The great majority of those who vote will not have heard of Mr Carney or have an opinion on his observations. Two I spoke to yesterday intended to vote Remain. Their reasons: one had a French holiday property and felt vague misgivings about disobliging the French; the other just didn’t like Boris.

    It is possible to conduct this debate on too high a level. As The Active Citizen points out, most will vote according to their own perceived interest, and that may be very small indeed. The conclusion must be that the Leave campaign’s single most important task is to build people’s confidence that a vote to go will not mean a vote for uncertainty.

    I do agree with Mr Redwood that Mr Carney, as a public servant entering the debate, had a duty of care to address both sides of it impartially before offering his conclusion.

    1. Antisthenes
      March 9, 2016

      It appears the Queen maybe a secret Brexit backer. It is understandable and conceivable that Her Maj is. If “Queen wants to leave” gains traction then that is sure to be a bucket load of votes gained by the leave side. She his held in great affection and esteem by the majority and rightly so. Pity about HRH prince Charles and his veggie and eccentric ways but the Duke and and Duchess make up for that.

    2. Know-dice
      March 9, 2016

      “It is possible to conduct this debate on too high a level.”

      Agreed…keep it simple, different regions/people will have different reasons as to why they will vote the way they will.

      So, you need different simple messages for each target audience.

      And don’t forget “referendum fatigue” by June 23rd people will/could be fed up with the whole debate and may change their mind as they walk in to the polling station.

    3. Denis Cooper
      March 9, 2016

      “felt vague misgivings about disobliging the French”

      As it happens the main reason I voted to stay in the EEC in 1975 was because we had only just joined, and it did seem a bit rude to people in the other countries to change our minds so quickly.

      Of course I had no real idea what was going on, or that it would be forty years before I was allowed another direct say on it, by which time the whole thing would have been changed almost beyond recognition.

      Maybe this chap should be reminded that many of the French people are also not over the moon about the EU, they voted against the EU Constitution.

    4. Anonymous
      March 9, 2016

      Eeyore – Or remind people that staying in is uncertain, that the EU is actually a sinking ship, not a lifeboat.

      The Turkey deal is actually a godsend for Out.

      Though I don’t believe in anyway that if we leave the EU mass immigration will improve.

      The reason for mass immigration is that a charitably minded clique wants to heal the world – except they do charity with other people’s money.

      I’d have far more respect for the advocates of borderlessness if they were giving up their place in the NHS queue, schooling, housing, jobs but they aren’t. They are all rich and float gracefully above it.

      1. Anonymous
        March 9, 2016

        I agree. Too high brow a level of debate will not capture the mass vote. Energy and resources will be wasted.

        I too hear people connect the EU with nice holidays. The Easyjet voter, as they say.

  12. Ian Wragg
    March 9, 2016

    Mark Carney wanted to be top dog in Canada and this looks increasingly unlikely. (words left out ed)
    His fall back position is a second term with the BofE.
    He has made some spectacularly stupid pronouncements and one wonders why we have to employ a foreigner when we have our own crop of numbsculls.
    Still it’s only taxpayers money.
    Of course he’s pro EU otherwise he won’t be considered for another term.
    I see Merkels Turkish deal is unravelling. Tell me John when was she appointed EU negotiator in chief.

    1. Antisthenes
      March 9, 2016

      Mark Carney was credited with Canada having a fine economy when the rest of us were suffering. He had no right to that accolade as the economy was doing fine despite him. Their economy was different as it was commodity based so the recession has only recently reached there. So he received his job at the BoE under false pretences and that is sure being shown to be the case now.

      1. Antisthenes
        March 9, 2016

        Perhaps it should be noted that Canada’s economy tanking caused Canadians to vote for a soppy lefty PM. The lesson being if it happens there it can happen here if our economy tanks and that is a distinct possibility before 2020. In that event will the voters turn to another lefty who is not soppy at all but a real hard demented Marxist and make him PM.

    2. Mitchel
      March 9, 2016

      Talking of people not up to the job and beloved of Osborne,I see Christine Lagarde is getting a second term at the IMF.

  13. sm
    March 9, 2016

    Well I’m pleased to read that, John – I thought it was just me (with absolutely no background in, nor knowledge or understanding of major financial affairs) who was always puzzled over the years at the BoE’s ability to get it wrong!

  14. dumpling
    March 9, 2016

    In all fairness to the BOE Eddie George did say the creation of the Euro was “an act of faith.”

  15. Shieldsman
    March 9, 2016

    I missed out on yesterdays comments on the Turkey/immigrant problem.
    The problem is entirely of the EU’s own making, Shengen has permitted an immigrant invasion whereby Italy and Greece have had hundreds of thousand of people turning up on their shores, many in un-seaworthy boats having to be rescued.
    They have ignored the Dublin agreement because they are choosing the Country in which they wish to reside. The richest with the best handouts.
    Germany has broken ranks in declaring open borders, and provoking a flood of asylum seekers and economic migrants. The EU is supposed to be a democratic union of member states where unanimous decisions are taken in the European Parliament. This is being short-circuited by a few Heads of State trying to buy their way out with payments to Turkey.

    Who will pay? The poor eastern and southern member states are nett recipients of EU funds, and do not want the migrants who in their turn do not want to stay there.

    The United Kingdom has a wonderful opportunity to withdraw from this chaotic bureaucratic Monnet organisation, regain our sovereignty and make our own decisions. The problem, too many ignorant people beholden to the EU and being bribed with our money – the EU does not have any money. We are the second largest nett contributor to the EU.

    So what is the problem? A chicken of a Prime Minister who is under orders not to let the Public vote to leave, using the full might of Government (which we pay for) to twist the facts. He started by claiming he had reformed the EU, a blatant lie, his deal did not involve any treaty changes nor effect other States membership.

    The bill by the way has gone up to £500million, which no doubt Cameron and Osborne will borrow to give to Brussels.

  16. bluedog
    March 9, 2016

    It seems that Mr Carney hasn’t stayed on speaking terms with his predecessor Lord King. If Lord King is right and if the Eurozone should be broken up, the importance of Sterling in European commerce could be expected to rise. Clearly a resurgent DM would be the currency of commercial choice within the EU, but many EU nations would not wish to see their business done in DM, France and Italy in particular. Thus if Lord King’s postulation is correct, the City will gain rather than lose by standing aside from the impending Euro debacle thanks to Brexit.

    1. Alan
      March 9, 2016

      The euro has retained its value better than the pound has over the period of the financial crisis, and that’s important for some people when deciding what currency to trade in and store their wealth in. There are a lot of people in the UK who would have been happier if their wealth had been stored in euros. For governments its useful to be able to devalue currencies, for people with savings it is not.

      I suspect that the only thing that might possibly destroy the euro would be if Germany became disenchanted with it. That’s not impossible, but the desire to keep the euro is very strong in most of the countries that use it. I wouldn’t expect the Eurozone to break up.

      1. bluedog
        March 9, 2016

        ‘…for people with savings’. Oh dear.

        Anyone with savings in a country where the monetary authorities practice QE is a lamb to the slaughter. Asset price inflation in the UK has far outstripped any currency volatility vis-a-vis the Euro. The purchasing power of the pound in your pocket today, if expressed in terms of house price purchasing ability, is as nothing compared to 2010. QE has seen a massive wealth transfer from the less well-off and from savers to the indebted. Zero interest rates create extreme asset price volatility, inevitably. At the same time savers are penalised by loss of income and loss of purchasing power.

        You may have heard of Donald Trump. His success reflects popular revulsion against this situation in the US.

  17. Bert Young
    March 9, 2016

    I dislike and disagree with LL’s condemnation of economics at Oxford ; as someone who has been much closer to the action I can reassure him that it is not what he describes . It is true that Oxford has produced the likes of Cameron ( a successful scholar but overshadowed by his ambition ) but as a place for stretching the mind and developing individuals of extreme talent , it is second to none . I trust John agrees with me .

    Carney’s record of being able to judge and forecast is not the best ; like many who felt that the appointment of an outsider would be for once a good thing , however I have since changed my mind about the validity and soundness of his judgement . Yesterday ( I did not witness his testimony ) the reports revealed someone who was not sure of himself ; he skated from one statement to another modified one ; overall I thought his performance was insecure .

    That there is some degree of the “unknown” in the event of “Brexit” is indisputable ; only the determination of getting on with it will eliminate this . I have considerable faith in the integrity of British manufacturing and the creativity of our services industry for me to have confidence that a “Brexit” result would be economically the best . Above all the ability to manage and decide what is best for ourselves is the only real consideration . I voted for “Out” before and I will do so again .

    1. Lifelogic
      March 9, 2016

      Well clearly it is second to science, maths, physics, engineering and other more sensible subjects at Cambridge.

      There is a large degree of “unknown” in the event of Brexit as there is in the event of remain. The future in general is largely unknown anyway. Who knows what dreadful governments we may get from the EU or indeed from Westminster. At least we can get rid of the latter though.

      There is no certainty in remain side either, other than the permanent loss of democracy and very large scale immigration.

      Clearly not all economists from Oxford are lefty, magic money tree, bloated state, high taxing, climate alarmist believing, chip on the shoulder, pro EU ones – but a very large proportion do seem to be. PPE seems to have an appalling output in general.

      Lots of academia is rather similar alas, much of the LSE for example.

      The sensible Allister Heath came out unscathed from both of these universities though.

    2. JoeSoap
      March 9, 2016

      Oxford also has a decent Chemistry department, which has produced a decent politician, albeit I can only name one.

    3. Anonymous
      March 9, 2016

      Bert – LL’s complaint is that students are groomed for politics, not the quality of the grooming. Doubtless is provides value for money for the graduate.

      Is there anything wrong with that ?

      Well it certainly seems so looking at our national debt.

  18. bluedog
    March 9, 2016

    One can be certain, Dr JR, that the man on the Clapham Omnibus has never heard of Mr Carney and would not pay attention to Mr Carney’s utterances either.

    But HM Queen is a completely different matter. One notes with approval that no less an authority than The Sun reports with a banner headline ‘Queen Backs Brexit!’.

    No more need be said. As this writer has previously observed, the Murdoch nuptials were a council of war. Expect much, much, more of this sort of meticulous investigative reporting. It seems Rupert is really going to town on Brexit.

    1. Lifelogic
      March 9, 2016

      Good for Rupert, may he have a long and happy marriage.

      Perhaps the Queen is feeling guilty for having signed the voters democracy slowly away to the EU, in several acts of parliament and without even asking the peoples consent.

    2. Alan
      March 9, 2016

      If what you say about Mr Murdoch ‘going to town on Brexit’, I wonder why. I believe he is not a UK citizen, nor does he live here, and I can’t imagine he is personally affected by the decision. I am puzzled over why his newspapers advocate Brexit so strongly. Why does he care?

      1. bluedog
        March 9, 2016

        Alan, think back to the events of just a few years ago when Murdoch was being rescue from a crazed attacker by his then wife in the HoC. Prior to that Cameron had been in cahoots with Rebecca Brooks, possibly more than Cameron was ever prepared to admit. Perhaps Murdoch has come to despise Cameron and sees a chance to even the score. As an Australian who became an American for business reasons, Mr Murdoch’s loyalties are hard to determine. However he is now a very old and very rich man with a new American wife who lives in London. He decided to marry in London, rather than in Australia or in the US, and that may be significant. He was educated at Oxford. In the 1980s the pinnacle of his career was in London when he took on the Fleet unions and won, much to the delight of Margaret Thatcher.

        Putting this together, it is possible that Murdoch has a deep affection for Britain, and doesn’t want to see the country submerged into a Euro-superstate. Murdoch has nothing to lose by fighting for Britain, can afford to do so, and would relish the humiliation of Cameron.

        One doubts these thoughts would have been part of Cameron’s calculus. Too late!

  19. Bob
    March 9, 2016

    The recently ousted boss of the British Chamber of Commerce has revealed in an interview with the Daily Mail that the govt are warning business leaders that their chances of getting lucrative govt contracts and/or honours may be dashed if they support Brexit.

    “John Longworth laid bare the power of Number Ten advisers and how they have committed the whole machinery of government to isolating and countering advocates of Brexit.

    He also revealed that lavish secret dinners had been held to influence politicians, BBC editorial directors and other opinion formers at the palatial German embassy in London. The tone of the dinners has been how can they collectively persuade the British public to vote to remain in the EU despite Mr Cameron’s failure to get any of the fundamental, far-reaching reforms mentioned in his Bloomberg speech.

    1. oldtimer
      March 9, 2016

      I am not surprised to hear that the German embassy is on the case. In his recent interview on Marr, Schauble, the German Finance Minister, said that Brexit would be “a disaster”. Germany will do what it can behind the scenes to avoid this disaster for Germany. They would then be the only significant contributor to EU coffers; pressure on the euro would increase; if the EZ implodes and Germany is forced to re adopt the DM then its effective fx rate would soar placing huge pressure on German exports.

    2. Pud
      March 9, 2016

      Are you sure the government had to wine and dine BBC editorial directors to get them to support remaining?

    3. Dick Whittington
      March 9, 2016

      The recently ousted boss of the British Chamber of Commerce has revealed in an interview with the Daily Mail that the govt are warning business leaders that their chances of getting lucrative govt contracts and/or honours may be dashed if they support Brexit.
      “John Longworth laid bare the power of Number Ten advisers and how they have committed the whole machinery of government to isolating and countering advocates of Brexit.”
      He also revealed that lavish secret dinners had been held to influence politicians, BBC editorial directors and other opinion formers at the palatial German embassy in London. The tone of the dinners has been how can they collectively persuade the British public to vote to remain in the EU despite Mr Cameron’s failure to get any of the fundamental, far-reaching reforms mentioned in his Bloomberg speech.

      This absolutely illustrates the need to bring back in full measure the law of treason, and the appropriate penalties for its breach.

      Justice will only be served when the traitorous bottom-dwellers are despatched with maximum prejudice – strictly only after a fair trial, of course.

      It won’t only be the corridors of Westminster and the BBC which will be emptied on the way to gibbet.

      The queue of people willing to pull the lever would stretch all the way from Whitehall through the Chunnel to Brussels…

    4. miami.mode
      March 9, 2016

      Bob. Have they also got at Len McCluskey?

      Have just read a most remarkable article by him on the Guardian website where he says he is not voting for the status quo…not voting for austerity imposed on Greece, Ireland, Portugal and elsewhere…not voting for proposed TTIP deal… and especially not voting for David Cameron’s renegotiation but nevertheless is voting for Remain in the EU.

      It begs the question, is he voting for some EU we don’t know about?

  20. Pericles Xanthippou
    March 9, 2016

    Much of the criticism of the Governor is rather strident: what he said, in his appearance before the Treasury Select Cttee., was hedged around with conditionals; and he could hardly go before the committee and say nothing.

    He seems inadvertently to have made a clear case for the replacement of the First Lord of the Treasury and the concurrent ministers and secretaries of state. In pointing out the uncertainty that might be expected to follow the British side’s winning the plebiscite he highlighted the need to start planning for such an outcome — a passage on which the Bank is apparently already under way, whereas the incumbent First Lord steadfastly refuses to give the order even to single up. One might argue, therefore, that he was implying the need to effect a replacement of the government now, rather than after the vote: just to ensure the machinery of government hit the road running.

    But let’s not panic. The difference between taking preparatory steps now and doing so in sixteen weeks’ time is a sixteen-week delay in recovering stability: uncomfortable, perhaps, but, in the greater scheme of things, not something over which we need be concerned.

    Whether, following the E.U. side’s loss in the plebiscite, its advocates ought even to have the chance to continue on the bridge is an important matter. I always thought of Mr. Cameron as a closet Lib.-Dem., practically indistinguishable from Mr. Clegg, and for that reason neither trusted him nor welcomed his appointment as party leader. My view seems to have been justified by the whole of this process, from the time he went to Brussels to obtain his ‘reformed E.U.’.


  21. alte fritz
    March 9, 2016

    On any given issue, whatever the Establishment supports is almost invariably wrong. When you are in the first flush of youth, that view seems revolutionary and as one becomes older, it can be seen as cynicism. However, the proposition somehow remains constant and true.

  22. Pericles Xanthippou
    March 9, 2016

    I’m afraid I cannot concur with the general view that baling out the failing banks &c. financial institutions in 2008 was correct: in doing so the politicians ensured that, as surely as night follows day, the episode will be repeated, regardless of the supposed strengthening of the capital side of those institutions’ balance sheets.

    Usurers have drawn the only inference any-one could reasonably draw from the error: that politicians will invariably steal tax-payers’ money to shore up the financial institutions on which their own re-election campaigns depend. It would have made sense, if public money were to be expended at all, to give (or lend) it to the mortgagors: that, at least, would have kept them in their homes and might have enabled the institutions whose assets consisted to so great an extent of dubious debt to weather the storm.


  23. Vanessa
    March 9, 2016

    Mark Carney made a complete mess of the Canadian economy, but apparently that qualified him to come to Britain to run our Bank of England ! It is no surprise that he is making a complete mess of our economy and banks. etc ed Obviously, the more stupid and incompetent you are the higher the job offers and salaries. This was not the case in my career years.

  24. Pericles Xanthippou
    March 9, 2016

    One really duff statistic I often hear deployed in defence of the U.K.’s remaining in the E.U. is the size of the E.U.’s population, normally given as 500-million. This is invariably represented as the size of the market, regardless of the wealth and income of the relevant countries. Of the population of 508-million (2015), 65-million were in the U.K.! Eliminating the weakest of the rest — seventeen economies unlikely to buy much from us — we find a market of 311-million (including children and prisoners presumably).


    1. Anonymous
      March 9, 2016

      Better to say:

      “Three million EU jobs is no good if we have to take ten million people.” (which we could well end up doing.)

  25. ken moore
    March 9, 2016

    So to summarise :Carney is worse than useless economically and his much trumpeted appointment by Gideon was a politically motivated stunt.
    All this nonsense from the BOe is a smokescreen to disguise the fact that the British economy is being run along the lines of a Ponzi scheme ie chaneeliing borrowed and printed money into ‘growth’. His and Osbornes mantra is :get your excuses in early.
    Some financial experts are predicting the pound could go as low as 70p to $1.00 anytime soon…..

  26. Pericles Xanthippou
    March 9, 2016

    Part of the problem causing the World’s economy to falter is — ironically — the inability of usurers to earn a reasonable return, which has caused an effective lending drought. Yes, you can borrow as much as you like to buy a motor-car, comprehensively insured and having a value remarkably predictable; but to fund a business venture? Oooo: dodgy! Why should a bank bother taking a risk for a poor return?

    It might have occurred to readers that the periods of sustained growth over the past few decades have been ones of relatively high interest rates. The idea that slashing them when ever economic growth declines will boost it is founded on an error of logic, one of those ‘instinctive’ errors such as referring to something that takes a long time to learn as involving a steep learning curve, when in fact it involves a shallow one. (Perhaps only mathematicians understand that.)

    Further: can savers (pensioners) be expected to maintain their level of spending at a time when their incomes are depressed by the appalling return on deposits? Yet, as the population, especially in the countries with the largest economies, ages, ‘the grey market’ becomes an ever more important proportion of to-day’s economy.


  27. Bobnotes
    March 9, 2016

    I think Mr Carney has a conflict in interests, also over paid too. I think it’s about time UK took back independence, and faced the consequences. Banking people tend to only work for their own interests. From a philosophical point huge bank profits/salaries devalue the overall value of their host as they actually do not do very little (if any) physical hard work for their gain. (middle men). Sadly many politicians are in the quicksand too (along with the endless EU bureaucracy/finance woes/banks). Sometimes I doubt Bankers/Politicians even realise they are living an altered reality and Therefore, Will not be able to realise we are better of without the Co-dependency of Europe. I am 100% confident trade and expertise will renegotiate to a more realistic UK EU balance outside the EU. If we have to continually depend on or ask for EU for budgets and incentives, or find out we are having to re-negotiate some new policy/law yet again. I think it is better to draw the line, move on and use our own initiative. Far stronger in the long run!

  28. JoeSoap
    March 9, 2016

    Clearly dog-whistle tactics. There’s risk in anything and everything. The difference is that when a particular risk is identified to the public by a well-known figure, people take notice. Why can’t the central bank work quietly away to avert the consequences of risk, if that’s what they think they have to do?

    A more balanced opinion would have said that there’s a risk in Leave and there’s a risk in Remain. The longer term and lingering risk is becoming diseased by being shackled to a corpse rather than the short term risk in burying it and being done.

  29. ian
    March 9, 2016

    At the end of the day the system will not change because of professionally politician coming out of uni all trained in the same way for the benefit of the elite and companies.

    No independent thinking, debt is all that matters with skimming off the markets, that’s how banks make there living and it always the people at the bottom who get hit because they will always save themselves.
    They do not have to lend out so much money but there is no regs on how much you should lend out, the sky the limit and the government love it because it make them look good and the people love there house price going up and being able to buy things they cannot afford.
    Everybody is to blame even the people themselves for being greedy and wanting everything yesterday.
    This system has been around for over a hundred years now and I cannot see it changing.

    Interest rates could be at 0 percent for years to come because there has been to much money lent out and wages are not rising also politician will not reform the tax system because they are frighten of what might happen the same go for the banking system, companies want lower wages, well lower everything but continue to pay themselves big pay rises,

    No men left, nobody wants to take the pain, all hiding behind one another. CATCH 22

    Reply I do not recall being trained to agree with all the elite wish to do when at university, and if I was they did not make a good job of it!

  30. Denis Cooper
    March 9, 2016

    I noticed that Carney said something about loss of exports if we left the EU, but none of the MPs picked him up on that by asking “What about their loss of exports to us?”

  31. ian
    March 9, 2016

    The baby boomers have it all, affordable houses, big pay rises, good pensions and if your in the top 2% percent still doing well with good pay rises and pensions and can borrow what you want and pay cash for BTL and houses, there is change on the way with the young people coming along now, they have seen what has happened and most with there first taste of debt with student loans they are not so hot on lending money.

    With wet & mad with the banks wanting people to borrow two times as much as they are lending now tomorrow to dig themselves out the hole they have dug, I can not see this happening because of young people, of cos the baby boomers will take as much as they can because that’s the way they have been trained but as they are all in there 50th now they are winding down now that is going to be a problem as well and further compounded by low interest rates because most older people have there saving in cash.

  32. Maureen Turner
    March 9, 2016

    So business’s leaders are being bribed to advise us of dire consequences should we consider voting Leave with the possibility of their reward being a gong. You’ve got to give it to our PM he’s a dab hand at subtlety.

    The man is merely the custodian of our democracy whilst in office and has right to use bribery to cheat us out of it. He is an utter disgrace

  33. ian
    March 9, 2016

    You know and I know that the BOE should be done away with and banks made to stand on there own two feet and if they lend out to much money they go down, it call self regulation and people money in banks ring fenced.
    The country and all the people are on the hook because of banking and you have nothing else to fall back on, it got to be the most unreliable system in the history of mankind.
    Now you have central banks you cannot see life without them.
    Everything revolves a round central banks, politician rely on them to keep yourselves out of trouble so you do not have do much and can keep on borrowing money to make out everything alright.
    The EU dream is all centre around the ECB that is to say taking sovereignty of other country and interlocking there tax systems and regs so the ECB has full control with unelected politician and the elite.
    You do not want that but you want it for your own people and country, you have in slaved the people and country into a central banking system which is held up by politician and media spouting propaganda and lies and by keep only one teaching of the financial system in university and the dumbing down of people by not teaching them how the system works and not giving them life skills they need for the world today.

  34. acorn
    March 9, 2016

    Poor Governor Carney. But, there again, he is paid the big bucks, to take the hit for a neo-liberal government, that is getting its fiscal policy wrong, in spades.

    Carney came from Canada where the central bank purchases government debt directly from the Treasury. The UK and the USA governments don’t allow this, the BoE purchases government debt in the secondary markets. This allows a casino market in bonds, that has no socio-economic value; but, makes a lot of City investment banks rich. The USA used to do the same as Canada, but Wall Street got that changed, via its tethered politicians.

    So please don’t let the politicians dump on Mark, there is very little he can do. Particularly as he is trying to compensate for Osborne’s, uncharted, austerity plan. He knows, (but can’t say), that trying to get a budget surplus, in an economy that is a net importer, means the only way is down to increased private sector debt. He has been warning about high levels of such, but politicians, assuming they understand what Carney is saying, which is doubtful, don’t give a toss.

    Central Banks in general, have very limited powers to stimulate an economy. QE, as a monetary policy tool, has proved incapable of increasing aggregate demand in any economy where it has been tried. Neo-liberal monetary policy is the problem, A fiscal expansion policy is the solution. Unfortunately, we don’t have a politician with the testicular fortitude to enact the latter. Perhaps we need a Donald!

  35. The Active Citizen
    March 9, 2016

    JR sorry, this will probably bore most readers but I’ve now waded through the nearly 3 hours of evidence from Mark Carney and Sir Jon Cunliffe to the Treasury Committee. Adding to your comments :-

    BoE’s Interpretation of Article 50
    Interestingly, Mr Cunliffe gave a new interpretation of Article 50. He stated that a period of negotiating the terms of the UK’s exit would be required first, separate from the negotiation of new trade terms. This is the first time I’ve heard this. Clearly this suggests even more protracted negotiations than we would otherwise have imagined. I wonder how he has an understanding of Article 50 which the rest of us don’t have? I also wonder where this fits in to the Bank’s remit, as I wouldn’t expect him to have volunteered such opinions.

    Marginalising the Risk of Further Eurozone Crises
    Overall, a significant problem with their evidence orally and in the Governor’s letter to the Committee is the way they almost ignore the risks of an increasingly-dysfunctional Eurozone. Mr Carney mentions in his letter, almost in passing, that “The euro area accounts for over 85% of the GDP of the rest of the EU, it is the largest destination in the world for the UK’s exports, and its financial system is tightly linked with that of the UK. This had implications for both UK monetary and financial stability during the crisis.”

    Despite this statement, Mr Carney seems very relaxed about the risks to the UK from staying in the EU when the Eurozone suffers further. It’s as if the EZ crisis is over. Apparently the only risks worth talking about concern the UK’s problems on a possible Brexit, not the effects that the Eurozone’s future failures could have on the UK if we remain in.

    Institutionalised Bias?
    Mr Carney spent 13 years at Goldman Sachs, well-known for their work helping Greece get into the EU and more recently as a big funder of the BSE campaign. Mr Cunliffe was UK Permanent Representative to the EU and previously Cabinet Office Permanent Secretary responsible for EU coordination. So one man worked for a firm thoroughly embedded in the EU and the other worked for the UK Government in Brussels. Hmm…..

    Listening to their evidence, it’s now clear to me that both men are constitutionally pre-disposed to favour our membership of the EU. In fact I believe they tried to be fair with their testimony to the Select Committee. It’s just that their very natures precluded real balance, and they may even be unaware of the full extent of their evident bias.

    Finally, it was interesting to seeg Mr Carney getting angry when Jacob Rees-Mogg questioned him. First time I’ve seen him lose his cool.

    [Sources: BoE website http://www.bankofengland.co.uk, Carney’s Letter to the Committee, The Live Hearing. ]

  36. Antisthenes
    March 9, 2016

    The leavers may as well rip up their pamphlets and go home. David Cameron as stated that he will not resign if he loses the referendum. So in the unlikely event that leave win Cameron will negotiate our exit. How is that going to work out a committed europhile who will arrange things so that we do not actually exit at all. So heads we lose and tails we do not win. I know the British are noted for their eccentricity but this is beyond that it is plainly absurd.

  37. turbo terrier
    March 9, 2016

    What further proof do you need when you hear Carney,CMD and Gideon and all the others going on about staying in the EU. The secret to success is to get promoted to the very limit of your incompetence. Step over the line and you are dead meat and will be spending tim with the family but in their cases with massive pensions paid by all of us

  38. adam
    March 9, 2016

    Why are the Scots being allowed to vote on the referendum, if they will demand an independence referendum if we vote to leave.

    If they won’t accept the result they shouldn’t be allowed to be party to the vote.

  39. David Ashton
    March 9, 2016

    You can take the man out of Goldman Sachs, but you can’t take Goldman Sachs out of the man.

  40. Colin Hart
    March 9, 2016

    JR, you wrote “When he first arrived he introduced forward guidance.”

    True, but it wasn’t his idea. He’d picked it up from Janet Yellen.

    I used to place a lot of faith in central bankers. Not so sure now.

  41. James Matthews
    March 9, 2016

    It appears that Mr Carney is expected to go back to Goldman Sachs (funders of the Remainders) in two years time. No connection I’m sure.

  42. Jon
    March 9, 2016

    The company I work for is going to join the crowd and re arrange their tax affairs for their shareholder benefit.

    We know what that means, a prominent company taking business from UK firms who pay taxes so they go out of business. The result is the individual has to pay more tax as the Global corporations side step but take advantage of a market well funded by tax subscriptions.

    Well along with robots etc I think our biggest threats are not half whit Isis idiots, not North Korea, Not Cyber but the hand full of entrepreneurs taking most of the worlds wealth and the rest of the world population realising a collective grievance.

  43. DaveM
    March 9, 2016

    This EVEL thing’s working well, eh?

  44. mickc
    March 9, 2016

    Good article, although you persist in describing the banks as solvent. Insolvency consists of the inability to meet debts as they fall due. The banks were insolvent and should have been allowed to go down. They remain insolvent.

  45. ian
    March 10, 2016

    I have been trying to think of some think in the past in a budget that would be lower than that but I cannot think of anything at the moment, how about you.

    To do it now so he dose not have to mention it in his budget where he got the money from, gross misconduct, gutless on top, the media might have field day with this one.

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