The Bank of England should cheer up

The Bank’s Report and measures today are mired in gloom.
I have no problem with the Bank allowing banks to extend more credit to businesses and individuals. I support them making liquidity and foreign currencies available to commercial banks so they can do their jobs.
What I would like to see is commentary from the Bank that is balanced. They accentuate the falls in banks shares, possible problems with property investment and the fall in the pound. They do not think through the lower borrowing costs thanks to the surge in UK government prices. Never has the UK’s credit rating in the market been so high. They do not stress the positive side of the fall in the pound, which will promote exports and inward investment and amounts to a monetary loosening. They do not point out that at lower interest rates the UK government will save money on the interest charges on its debts as it rolls over old debt and incurs new debt. That gives the government the option of a lower deficit or more money to spend.

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    Posted July 5, 2016 at 12:13 pm | Permalink

    I have just seen news excerpts from the BoE’s statement today.
    If they were deliberately talking the Pound down and trashing the UK’s prospects, then they could not have done better.

    • Jerry
      Posted July 5, 2016 at 6:33 pm | Permalink

      CH; Once again you are mixing up cause and effect, Brexit has brought doubts to the markets etc, the BoE are reporting those doubts.

      • Edward2
        Posted July 5, 2016 at 10:57 pm | Permalink

        But a cheery up beat calm down message from the Bank would be welcome.
        Restore confidence etc.

        Posted July 6, 2016 at 2:23 am | Permalink

        Oh I see. Which people in particular were previously unaware of the “doubts” message which convinced the BoE they should communicate the “news”?
        No, for an official and “respected” body to cast doubt on the economy it oversees, incorrectly as it happens, repeatedly, has the only known effect of damaging that economy…or, the chart representation of it
        Fortunately the gloomy BoE forecasts are so patently wrong that the results are merely sudden jumps of a few pips on daytraders’ charts who, love “uncertainty” and “doubts” and await with glee bigwigs’ speeches as their fellow daytraders are also awaiting “doubts”
        No-one makes much money in a doubt-less certain market. Our strong economy is wonderful for speculators; any sudden dip will rebound, any sudden rise will decline back. Timing is of the essence. Shorts and Longs are the means.
        How the Remain Camp are happy when and if their theories of economic collapse appear to be right. Pleasure in a seeming downfall of their belov-ed country. Failure to accept a democratic ballot. Their hearts not in England but in some foreign clime peopled by persons who wish us ill as their only way to succeed. They seek comfort in astrological dreams.

      • libertarian
        Posted July 6, 2016 at 5:20 pm | Permalink


        Once again you are wrong. Its not the BoE job to report on the markets and the pound that is best left to the markets. It s the BoE job and I quote directly from their own mission statement

        It is thhe Bank’s mission to promote the good of the people of the United Kingdom by maintaining monetary and financial stability.

        So talking it down by reporting the swings in the currency markets when they dip is not fulfilling their role

        • Jerry
          Posted July 7, 2016 at 6:25 am | Permalink

          @libertarian; Try actually understanding what you cite!

          That is what they are doing, by saying what they are and that the BoE has various tools at their disposal, which is no different to what the markets are saying, the BoE is “maintaining monetary and financial stability”. Far from “talking [it] down” they are actually talking it up, they are in effect saying that there is nothing to be worried about, the BoE has it covered, stop panicking!

          Just because you do not like the style of message, that ‘Brexit’ has thrown up risks for some and they are responding to such risks, it is no reason to try and trash both the BoE and its governor – by doing so all you are doing is giving a very good impression of a Stalk on the sand doing what they do best. 🙁

          These complaints against the BoE are not economic in nature, noire are the accusations against the media in reporting the above about bias, they are political.

    • Cora Happleton
      Posted July 5, 2016 at 10:17 pm | Permalink

      John, you said “Never has the UK’s credit rating in the market been so high.” however, the UK credit rating was cut a few days ago, and by two levels which is an unusually big move.
      You also said “They do not point out that at lower interest rates the UK government will save money on the interest charges on its debts as it rolls over old debt and incurs new debt. That gives the government the option of a lower deficit or more money to spend.” however, you do not point out that these lower interest rates are likely to be prompted by a) fear of lower inflation which in turn means the true cost iof repaying this debt would be higher (as not eroded by inflation) and b) lower growth meaning less tax and more expense for government.

    • sjb
      Posted July 6, 2016 at 12:17 am | Permalink

      Standard Life, Aviva and M&G have suspended trading in commercial property funds. Does anyone know how many months fund managers have to sell commercial properties to meet the redemption requests?

      • Denis Cooper
        Posted July 6, 2016 at 9:59 am | Permalink

        That depends on the terms and conditions, which investors should have read before they put their money into the fund, but I guess that in most cases the best answer would be “indefinitely”. If you invest in a collective fund which buys and sells illiquid assets then you have to be prepared for the possibility that under some circumstances too many of your fellow investors will want to withdraw their money at once.

        This is by no means the first time this has happened and anyone who wants to be sure of being able to get their money out at short notice should not invest in any such fund, as doing so is only one step away from investing in the underlying illiquid assets themselves.

  2. Anthony Makara
    Posted July 5, 2016 at 12:15 pm | Permalink

    The BOE under Mark Carney has a glove puppet relationship with the exchequer and George Osborne and is increasingly doing the bidding of the govt of the day. If the BOE is independent it should be dispassionate too. Mark Carney’s vox propaganda during the Referendum campaign was the last straw for me. He must go.

    • zorro
      Posted July 5, 2016 at 4:49 pm | Permalink

      The ‘independent’ BoE is clearly a joke, and appearing to act on the Osbourne agenda….


      • Lifelogic
        Posted July 5, 2016 at 7:32 pm | Permalink

        Is IHT ratter and (emergency budget threatening if you get it wrong) Osborne still there, has he not done enough damage already?

  3. Lifelogic
    Posted July 5, 2016 at 12:16 pm | Permalink

    Indeed but the BoE is totally wrong in imagining that the banks are lending freely. They should talk to some bank customers for a change to find the truth out instead of listening to what the banks tell them.

    They are not lending freely, certainly not at sensible rates and are very slow indeed in making decisions. They are tied up in capital requirements, stress testing, low LTVs. slotting rules and many other government obstacles.

    They are also far too expensive on margins and fees and very inflexible indeed to anything outside there standard restrictive lending boxes.

    Lent to them and they pay less than 1%, borrow from them and they want +3.5% to +50% often from customers far more credit worthy than the bank itself!

    Get some real competition in the bank lending market now. Many bank only want to lend at all if you give them some of your investments to manage (which they usually do very badly indeed).

  4. Ian Wragg
    Posted July 5, 2016 at 12:16 pm | Permalink

    Carney is Osbornes placeman and as we learnt today,Osborne asked the German Chancellor to say we wouldn’t have access to the single market.
    These people are despicable talking down Britain all the time.
    The sooner they are gone the better.

    • A different Simon
      Posted July 5, 2016 at 5:06 pm | Permalink

      One wonders why Wolfgang Schauble went along with Osborne’s moronic project fear request in the first place .

      Together with Cameron , he has done his best to undermine Britain and British industrial capability .

      They have all but disbanded our armed forces .

      Does anyone have any doubt that Briton’s nuclear deterrent is to go too ?

    • Timaction
      Posted July 6, 2016 at 2:34 pm | Permalink

      It goes to show the lengths these underhanded quislings will go to sell us outfor their federalist ambitions. We need the Treason laws back in soonest and a means of holding these people to account!

  5. Atlas
    Posted July 5, 2016 at 12:39 pm | Permalink

    The Lady Di effect ??

  6. Remain Voter
    Posted July 5, 2016 at 12:43 pm | Permalink

    If you are such a good economist Mr Redwood why don’t jump ship and put your name forward as the next Chancellor of the Exchequer or Bank of England Governor. It’s much easier to sit outside the fence and criticize people inside than actually take responsibility and do something. All your Brexit friends are disappearing into their cosy corners one by one.

    Hope this comment passes the criteria of this website to get published.

    Reply I would be happy to serve. That will depend on the next PM.

      Posted July 5, 2016 at 4:46 pm | Permalink

      Remain voter:
      Your comment to Mr Redwood is equivalent to saying to you ” It’s easier to sit outside the fence and criticise people inside than actually taking responsibility and do something. You don’t like being out of the EU then flit to Bulgaria or Lithuania to be with your fellow countrymen and women. All your Remain friends are disappearing into such cosy corners one by one. Not long left for you to avail yourself of the “free movement of workers”.
      Obviously you are most welcome to stay in the UK if you already live or were born here. Unlike most European countries, yes most, we have a proud history of tolerating and in fact encouraging freedom of speech and dissent.
      European countries are extremely unstable

      • Remain Voter
        Posted July 5, 2016 at 10:20 pm | Permalink


        Thanks for exercizing your freedom of speech here. 20 odd countries including the UK have sat around a table and accepted joining of Bulgaria and Lithuania to European Union. When they were joining, you as a European citizen, had total freedom to lobby with your MEP to stop it. It’s typical of Brexiters to talk about other European countries in that way, to show their total tolerence of countries who may have just learned to establish a democracy.

        • Anonymous
          Posted July 6, 2016 at 7:10 am | Permalink

          Remain Voter – Your position is rather undermined by the fact that the establishment didn’t panic over UKIP winning the EU elections by landslide.

          Why ?

          Because it knows MEPs have no influence whatsoever.

          • Remain Voter
            Posted July 6, 2016 at 11:48 am | Permalink


            UKIP has achieved what they were after, i.e. Brexit, so how they had on influence is debatable.

          • Timaction
            Posted July 6, 2016 at 2:42 pm | Permalink

            We had no choice in any accession Treaty and the legacy parties withheld any referendum until UKIPs unrelenting challenge ensured victory in EU elections and our referendum. Hague’s referendum lock legislation withheld accession as an exemption. Rejoice in our freedom from the tyrany of the EU Commissioner dictators. It would have been 70/30 for out if it had been a free and fair election, but even with the biggest gerrymandering in our history by your pals we are out!!

          • Anonymous
            Posted July 6, 2016 at 5:52 pm | Permalink

            Remain Voter 11.48 – Not as MEPs they didn’t ! UKIP did it during a domestic general election – by threatening to create real MPs.

          Posted July 6, 2016 at 3:38 pm | Permalink

          Remain Voter:
          …”…lobby with your MEP…”
          May I suggest you try, say in a Labour Party area with a Labour Councillor ( it may also be the case with other Party councillors ) to LOBBY. They have a Party-line. In the interview for being on the list of prospective Labour councillors they are asked rhetorically if they will at all times follow the Party line
          I would love that even at that low level of “democracy” that to lobby was the least bit effective.
          At MEP level we are looking at such a remoteness of democratic control and influence as to be useless. Have you any idea how many persons/voters are under one MEP?
          Actually the numbers vary considerably within the UK and within each EU nation. Here’s a clue: Greater London has one MEP seat for every 980,000 people. Remain Voter; Don’t get suckered into buying lottery tickets, they’ll see you coming.
          Can you imagine one MEP even with the very best of intentions and without following a Party line, which they do, being able to listen to each of nearly one million people LOBBY???
          You voted to remain in structural dictatorship.

    • JoolsB
      Posted July 5, 2016 at 9:26 pm | Permalink

      John would make an excellent Chancellor but he cannot put himself forward, it doesn’t work like that. It’s a decision for the next PM, no-one else. Let’s hope the next PM is Andrea Leadsom and not May who no doubt has already promised all the top jobs to the remain cronies in return for their vote.

      • sjb
        Posted July 6, 2016 at 12:25 am | Permalink

        Whether Leadsom is PM or not, I think she should take the lead in providing us with better particulars of the Brexiteers’ proposals, e.g. WTO, EEA, bilateral agreements.

      • Lifelogic
        Posted July 6, 2016 at 2:40 am | Permalink

        Surely reading the list of May supporters is enough to put anyone sensible of supporting her. It is clear that Tory MPs are about 70% for remain even now. Hopefully the membership are sensible. But will the MP stich it up to push Gove through, thinking he is easier to beat than Leadsom? I am still not convinced we will ever escape the EU. Certainly not with the dire and tedious Mrs May.

  7. The Prangwizard
    Posted July 5, 2016 at 12:52 pm | Permalink

    My sentiments exactly. Carney was appalling, he is clearly more interested in self than anything else.

    He should be removed from his position.

  8. Ian B
    Posted July 5, 2016 at 1:05 pm | Permalink

    I cannot help but feel that some bad losers are desperately trying to make their previous apocalyptic predictions come true.

    • Lifelogic
      Posted July 5, 2016 at 8:28 pm | Permalink

      Indeed they are most of the BBC, the treasury, Osborne, most of the state sector and lots of other hangers on too.

  9. alan jutson
    Posted July 5, 2016 at 1:06 pm | Permalink

    I find it all rather amusing if it was not so serious with regards to these so called reports of gloom, from so called experts.

    So we voted out only 10 days ago, and people are trying to make an assessment of our future and how it compares with project fear.

    Given the report was released today, I guess they used figures and trends for the previous 5 days, Monday-Friday last week.

    What right minded individual, let alone a supposed bastion of corporate power and sensibility makes a prediction based on a 5 day period, especially when their forecast of the result (which they had many months of information to get right) was wrong.

    Perhaps make an assessment after 5 years or even 5 months, but 5 day’s !!!!!.

    Its a bloody joke, and does immense harm to those in the establishment who promote it.

    We will end up having a downturn/recession because they have talked and frightened everyone into it.

    Shame upon them.

  10. Denis Cooper
    Posted July 5, 2016 at 1:10 pm | Permalink

    And now we have Letwin saying that the fair treatment of EU nationals in our country is conditional upon the behaviour of their governments, which of course is beyond their control. It seems we have no standards of our own, we have no morality, no sense of right and wrong, instead we have to wait to see what politicians in other countries decide to determine what we do. Presumably if one of those governments unjustly decided to put all the UK citizens resident in that country into internment camps then May and Hammond and Brokenshire and Letwin would inflict the same injustice on all their citizens living here and in the power of, and the protection of, the UK government. I cannot see that any of them are fit to be in that government.

    • A different Simon
      Posted July 6, 2016 at 1:12 am | Permalink

      Denis Cooper ,

      The word on the streets is that Letwin has been performing the Mandleson role for some time and that Cameron was just a figurehead .

      If Cameron gets his orders from Letwin , who does Letwin get his orders from ?

      • Hope
        Posted July 6, 2016 at 3:59 pm | Permalink

        Letwin and Poll tax springs to mind. What a disaster. Why is he still around cabinet?

  11. Tim Chick
    Posted July 5, 2016 at 1:12 pm | Permalink

    I couldn’t agree more.

    I feel like saying ‘get a grip on yourself man’ to Mark Carney. All your doom-mongering is going to become a self-fulfilling prophecy. But then bearing in mind his interventions in the Brexit campaign clearly on the side of ‘Remain’ should one be surprised? He can then say ‘ I told you so’.

    Whatever happens he is cushioned by his magnificent salary and the fact he can return to Canada when his tenure at the BoE is over, so he is substantially insulated from the consequences of his decisions.

    He is a reminder of the fact that despite all the experts paraded by Remain, people did not believe them or were of the view that they had had enough of others saying ‘we know what’s good for you’.

    I firmly believe that given the right leadership and circumstances the UK can unequivocally resume its place as one of the top nations in the world.


  12. Roy Grainger
    Posted July 5, 2016 at 1:24 pm | Permalink

    I see Richard Branson had a meeting with Theresa Mat today. Is she going to hold similar meetings with all the other voters ?

      Posted July 5, 2016 at 4:49 pm | Permalink

      Roy Grainger:
      Serves her right if he sells her Virgin Broadband

      • A different Simon
        Posted July 6, 2016 at 1:22 am | Permalink

        Anyone who travels mostly by Virgin trains , would almost certainly be in favour of renationalisation .

        Anyone who has lived area for more than 20 years cannot help having noticed the huge improvement in punctuality , service and customer service since South West Trains took over .

        I hope Branson can do better with Virgin Galactic .

        etc ed

    • Lifelogic
      Posted July 5, 2016 at 8:29 pm | Permalink

      Will she be seeing Delia Smith and Beckham too?

        Posted July 6, 2016 at 2:24 am | Permalink

        Not if they see her first, probably.

  13. Northern mountaineer
    Posted July 5, 2016 at 1:28 pm | Permalink

    Mark Carney’s comments this morning were very negative about the UK and not supported by the reality of the markets. To state that the UK economy is victim to, or defined by outside influences or other countries is farcical. We set our own rules, our own agenda, our own fiscal regime, we run our own economy, we are proactive, we decide our own future.

  14. Antisthenes
    Posted July 5, 2016 at 1:45 pm | Permalink

    We do not look past our own prejudices which to some extent is understandable but when the tax payers are footing the bill for our civil servants (so called expert professionals with open and clever minds) to hep us create a just and equitable society we demand better. We pay them handsomely to offer sound advice, be competent and look after our best interests in what they are tasked to do. Instead we are receiving information and competence that is not good value and usually in their or their pals interests not ours.

  15. Dioclese
    Posted July 5, 2016 at 2:07 pm | Permalink

    It worries me to see that the Bank of England is not neutral and worries me that there are political motivations within which should not be the case.

    IMHO Mr Carney needs to modify his bias or step down. I would be happy with either but not the status quo.

    Incidentally, off topic, I hope that you (my former neighbour incidentally when I lived in Wokingham who I remember fondly from the conversations we had on the floor of the count some years back) and my current near neighbour Lord Tebbit will impress on Mrs Leadsom the need to fight to the bitter end in this election as I believe she has more widespread support in the party membership than Mrs May and could well come through in the final stage.

    • McBryde
      Posted July 5, 2016 at 6:03 pm | Permalink

      I think it’s pretty clear what’s going on.
      Osborne can’t go, Carney is doing the right thing. The BBC too.

      All of them are working together to compromise the resolve of the exiters so that, in the next month or so, the economy in particular will seem so bad that the remainiacs will be able to recover lost ground.

      Unless the Murdock press is still behind our bid for independence, it’s all pretty one sided. By omitting the good news and exaggerating the bad … and pretending a low pound is a bad thing, they are trying to bully us in the usual obvious and tiresome way.

      But I think there is a powerful energy emanating from the grass roots which seeks to be better informed, and which has had enough of spin. I hope they will continue to assert themselves.

      I love to hear/read politicians who speak not for themselves, but for the people they serve. I hope that when/if power comes to them, they will continue to honour their country.

    • Janet
      Posted July 5, 2016 at 8:46 pm | Permalink

      On the ConservativeHome forum, Paul Goodman has a thread for discussion this evening:
      ‘May has half the vote. If Tory MPs clearly want her, should Party members defy them?’
      One can only hope that there are many independent-minded party members out there.

      • Richard1
        Posted July 5, 2016 at 10:18 pm | Permalink

        It is a good question. What is the relevance of 150,000 self-selected people? The next leader and PM must be able to command a clear majority of MPs. No doubt Tory MPs will have the sense to get behind whoever wins, but we don’t want to end up like Labour where the reincarnated Militant Tendancy mob has foisted Corbyn on them!

      • A different Simon
        Posted July 6, 2016 at 1:32 am | Permalink

        Do half of Conservative MP’s want to lose the next general election ?

        Or are they just thick lobby fodder ?

  16. Bob
    Posted July 5, 2016 at 2:17 pm | Permalink

    I wonder if people are manipulating the currency to make a few quid on the side while the political fallout lasts.

    I seem to remember a National Bank chairman of a country in Europe (but not the EU) had to resign because similar activity by a close family member.

  17. Tad Davison
    Posted July 5, 2016 at 2:20 pm | Permalink

    Of course there are uncertainties as we exit the EU, but there are uncertainties with any new venture, so we need to have balance and optimism too. The British economy needs to be talked up and its strengths expounded. Britain is still a great place to do business. People need to be reminded of the many good points in its favour lest the merchants of doom create a situation of self-fulfilling greyness and doubt.

    I say lets get rid of those negative people in the remain camp who cannot see a bright future for the United Kingdom, and let’s have JR for chancellor!


    • Lifelogic
      Posted July 6, 2016 at 2:43 am | Permalink

      Perhaps the biggest uncertainty is will we ever exit the EU at all if May and all her remain backers get in?

  18. dogrose foxglove
    Posted July 5, 2016 at 2:26 pm | Permalink

    I am concerned about the BBC. Damaging, negative and not impartial.

    • Lifelogic
      Posted July 5, 2016 at 8:30 pm | Permalink

      Indeed they distort the whole of UK democracy with their pro EU, lefty , green crap, ever bigger state agenda.

    Posted July 5, 2016 at 2:28 pm | Permalink

    The news moving image of Ms Leadsom wearing a red top and darkish skirt……pulling a shopping trolley…… did more eliminating her viers for leadership than most anything else. The others, in the unspoken hearts of the public, are doubted as ever requiring food or a toilet.

  20. Russell
    Posted July 5, 2016 at 2:33 pm | Permalink

    You’re too polite John. The Bank of England has the whiff of a fifth column about it. But maybe that was always the point of it. Will this ever be discussed by the media I wonder?

    Posted July 5, 2016 at 3:23 pm | Permalink

    The likelihood in this day and age of events such as emails being accidentally sent by experienced and competent people and with technological in-place guards against such happenings to third parties as in the case of Gove; and, accidentally appearing on a Sky News camera in a Sky News office as in the case today of Mr Rifkind MP (?) ( associated with the nation’s Security ) and Mr Clarke MP is according to the laws of mathematical probability zero.
    etc ed

  22. miami.mode
    Posted July 5, 2016 at 3:26 pm | Permalink

    They appear anxious to ensure that their dire predictions of life after Brexit will become fact.

  23. Bert Young
    Posted July 5, 2016 at 3:58 pm | Permalink

    Manufacturers and service providers should be chasing customers with fervour ; products and services are now priced very attractively and should attract . I listened to an excerpt of the Carney’s speech today and cringed at the implications ; John is right to point out the negative impact such utterances have – emphasising the positive should always come first .

    We do face challenges and not everything is rosy , however we have nothing to gain if we put adversity in the front rank .

  24. Ian George
    Posted July 5, 2016 at 4:08 pm | Permalink

    and I forgot to mention dear old Auntie Beeb doing their level best to make sure they all succeed!

    • Ian George
      Posted July 5, 2016 at 4:38 pm | Permalink

      Maybe my earlier comment was missed? Here is it again…

      I worry that I wasn’t too wide of the mark here…

      In the case of my host country the opposition party – aided by their friends in the European People’s Party – tried to collapse the Georgian economy in order to force the newly democratically elected (by a landslide) government out of power.

      Just today I read that Juncker was now calling Britain a failed country. I was worried just after the referendum by Obama’s curious choice of words that “the pause button had been pressed” [on the UK’s deeper integration with the EU], and we now have the Europhile Tony Blair trying to muscle his way in to the negotiations, millionaires and their lawyers inventing artificial barriers to leaving, the leading candidate for the Tory party and the Chancellor fomenting worry in the minds of current workers in the UK from other EU, and various unhelpful statements from people who should (and DO) know better which all serve to add meat to the bone in Juncker’s attempt to make an example of the UK.

      I’m sorry if that sounds a little crazy but I live just outside the EU bubble and have watched it swell for quite some time.

      I hope there are enough people on the honest side of the fence who realise that you can’t just be nice and polite with these people and expect fair play in return.

      Someone needs to stand up and call a spade a spade. If that means publicly calling out Carney and Osborne on what are borderline anti-state activities then so be it.

  25. Mark
    Posted July 5, 2016 at 4:38 pm | Permalink

    I have read the new Financial Stability Report, available here:

    It asserts problems that long preexisted the referendum are the consequence of the Leave result, including the bursting of property bubbles in commercial property and BTL investment (punctured by Osborne’s rises in SDLT in the last budget and other tax measures); the financing of the large current account deficit (not helped by remittances to aid, international organisations, migrants’ families, and the payment of interest and dividends to foreign owners and lenders, as well as an economy whose competitiveness is hobbled by EU membership); the existing problems in the Eurozone that look likely to result in further bailouts in Greece and Italy and probably elsewhere too; the exposure risk to the weak Eurozone banks.

    Most of these things are best cured by leaving the EU. The Bank has been standing on its head in making its assessments.

  26. zorro
    Posted July 5, 2016 at 4:44 pm | Permalink

    I am afraid that the BoE is becoming Ted Heath personified in a continual long sulk at having been made to look foolish with its Project Fear agenda. Not one positive word about anything and every pronouncement weighted in a negative manner. What do you propose to do about this incredible sulk behaviour?


    • Lifelogic
      Posted July 5, 2016 at 7:37 pm | Permalink

      BBC the same too.

  27. acorn
    Posted July 5, 2016 at 5:06 pm | Permalink

    I think I will hand over to Dennis Craggs, (Posted on this site July 3):- “It’s FAR FAR FAR to early to say, many of these comments are wildly optimistic and much of it is economically illiterate.”

    Anyway, for those that have not yet read the FPC report and don’t know their “capital conservation buffer” from their “countercyclical capital buffer”. Just remember that whatever happens from now on, it is actually ALL ABOUT SAVING THE BANKS. Particularly, the Euro banks. A lot of them operate in the UK. A lot of them have yet to flush down the toilet, all the bad loans they have amassed since the GFC. You can get a clue from bank share prices.

    BTW. “Never has the UK’s credit rating in the market been so high.” The hot money chasing higher yields. Commodities and Real Estate are now in Brexit no-man’s-land. That leaves bits of paper. Corporate paper is bubbling due to QE, that’s what QE was for. That leaves Government paper which is basically risk free and its price is being driven up (yields down).

    BTW2. The government does not borrow its own money, it is the currency issuer. Gilts are basically welfare payments (the interest that is) for rich peoples pension funds. One day, we will have a benevolent Chancellor who understands this fact and will stop issuing them.

    Unfortunately, the 99% will never bother to learn it; they will be crapped on for evermore by the 1% metropolitan elite. Google:- The Noble Lie — Revealed It’s time to let you into a little secret.

  28. zorro
    Posted July 5, 2016 at 5:14 pm | Permalink

    Did you enjoy 😉 Mr Clarke’s incisive and unguarded exposition of his views on the candidates on SKY?


    • rose
      Posted July 5, 2016 at 8:29 pm | Permalink

      I don’t enjoy the prospect of a bloody difficult woman who knows nothing about foreign affairs.

    • Lifelogic
      Posted July 6, 2016 at 6:43 am | Permalink

      I imagine Mrs May is indeed difficult to deal with. More to the point she comes across and bossy and boring. She is not an electoral asset and it likely we will never leave the EU under her leadership and with her dire list of remain backers. Lacking the courage to come out for leave, and lying to the electorate about immigration, she is totally unsuitable.

      • zorro
        Posted July 6, 2016 at 6:32 pm | Permalink

        She was economical with the actualite certainly. Presenting a passport at the border is hardly a control if you let them in regardless and cannot effectively check their criminal status in their home country!


  29. Newmania
    Posted July 5, 2016 at 5:32 pm | Permalink

    lJohn , people are getting into Bonds as safe haven, that is also the reason the FTSE 100 is bouncing illogically , with so much mining energy and other solid deals worrying times will have a perverse affect in the short term. The FTSE 250 looks worse
    The reason Carney is gloomy is because he is expert in what he does , he is not a stooge of some mysterious cabal also he has already had to take action to stave off the effects of your appalling leap in the dark

    The positive side of the pound falling … I mean really , that’s absurd. It can only go up and down , were it able to fly about writing “ I Hate Brexit” you would still find some silver lining but you would certainly applaud it going up

    John you are becoming K Paxian

    • Anonymous
      Posted July 5, 2016 at 11:11 pm | Permalink

      Newmania – No one thought this was going to be easy.

      But seriously.

      The ruling elite have refused to put an upper limit on mass immigration.

      The people (not John Redwood) have, therefore, decided that throwing out the economy with the bathwater is a risk worth taking.

      Because the mass importation of poverty or the mass exportion of wealth amounts to the same thing to the working class, but I don’t expect you’d feel that from where you are.

      The only thing that will stop it, it seems, is when our country is not worth moving to. But that is coming anyway – with or without Brexit, which is being blamed for a lot of things that were going to happen anyway.

      • Newmania
        Posted July 6, 2016 at 5:33 am | Permalink

        In fact the people were offred a deal in which there were £151bn of additionla psending promises and they are still clamning there will be extra monbey fior th NHS when this is quite transparently not true

        • Anonymous
          Posted July 6, 2016 at 5:46 am | Permalink

          Newmania – In fact the people were offered a picture ranging from utter doom (and plenty of it) to optimistic over the complete spectrum of the referendum debate.

          On balance they picked Brexit.

          That must be respected.

        • Patrick Geddes
          Posted July 6, 2016 at 7:30 am | Permalink

          Is that the reason you think 17 million people voted to Leave?
          You are wrong.
          I believe most made their mind up to vote Leave years ago.
          And Remain with their Project Fear lies had a very negative effect on the vote for the Remain side.

    • Caterpillar
      Posted July 5, 2016 at 11:33 pm | Permalink

      New mania,

      I think the point about the safe haven is that the spread between uk 10 year and bunds is similar to most other countries, it isn’t at 8% like Greece, which I think we will all agree is risk, not optimism for equities. Lower borrowing costs could allow some fiscal loosening, but not so much as to go like Greece. Refinancing UK debt ought to consider taking advantage of the rates now.
      In terms of GBP, at the end of 2015 (pre all the referendum stuff) many were saying that the pound was overvalued and should be in the $1.15 to $1.30 range, Brexit may have reduced some of the safe haven nature of the U.K. and GBP is finding a fairer value, aligned with balance of payments …

      I think our host is correct. The Governor needs to balance adjustment and preparation for that adjustment, with creating too pessimistic an outlook.

      • Caterpillar
        Posted July 6, 2016 at 11:53 pm | Permalink

        Moreover Investors might (will) be expecting Mr Carney to stick with his same play book and to buy more bonds, forcing the price up.

    • Juno
      Posted July 6, 2016 at 5:32 am | Permalink

      Is it the chicken or the egg ?

      “the Governor – as if in a fit of pique over voters’ defiance of his warnings – seems determined to prove all he said before the vote is coming true.”

      The same too of the Chancellor and of the BBC (which has been talking down the economy since the Brexit result was announced.)

      How dare the people vote Leave !

      • Juno
        Posted July 6, 2016 at 5:40 am | Permalink

        If people were worried about Greece going belly up – well imagine what they’d say if Britain did !

        It is not happening and it won’t be allowed to happen.

        But if it does then it’s due to the fact that the EU was immovable on a few minor and perfectly reasonable concessions to the Prime Minister of one of its major states when he had a referendum to Leave the EU on his hands.

        Because of this the people got sight of the EU’s truest nature and the EU’s potential to turn this into a crowded, third world island because it will – not – listen.

        So how does the EU get off scot free of blame in all of this ?

        Is the only option that we lie down and take it ?

      • Simon Ian
        Posted July 6, 2016 at 7:16 am | Permalink

        This is all a bit sad. Like blaming the Met Office for the bad weather it accurately predicted.

  30. Margaret
    Posted July 5, 2016 at 5:52 pm | Permalink

    I agree with Ian B .’ I warned you and I am right and I will continue to show you how right I was mode…….’

  31. John Robertson
    Posted July 5, 2016 at 5:55 pm | Permalink

    Exactly, and oil and gas in the UK has been through a torrid time before Brexit campaigning started. Since them there has been billions flowing in raising their share price. Not all to do with Brexit but recon mostly like other commodities that are doing well.

    That is a much needed shot in the arm for the North Sea oil and gas companies.

  32. stred
    Posted July 5, 2016 at 6:23 pm | Permalink

    MSM has been saying the lack of applications for finance of commercial and BTL investment is caused by Brexit. I think Carney said commercial property has been falling for 3 months- during a period when Remain was expected. G.Osborne has systematically pulled the rug from under BTL to the extent that many are getting out rather than getting in. The fall in the pound may make it more interesting for foreign investors providing they are not individuals.

  33. stred
    Posted July 5, 2016 at 6:36 pm | Permalink

    I caught the Lords debate passing between channels and a large majority of these unelected- often never- liberal activists were making the most of the Cameron/May/Hammond/Remain gaffe of using EU migrants as bargaining chips when there was no need to. The blame was put on the huge Brexit mistake and there was no mention of the fact that Remain/UKIP was against this throughout. These confused failed politicians, religious guardiantitas and rich Torys are hell bent on getting a second referendum and keep repeating that poor Leavers have been deceived by the £350m/week ‘lie’ and Turkey joining next week stuff that was made clear as not correct during the campaign. As forcast one doggy figure on Leave side will be repetaed endlessly while all the untrue Fear forecsts forgotten.

    Etc ed

    • stred
      Posted July 5, 2016 at 6:39 pm | Permalink

      Oops. Leave/UKIP and dodgy not doggy. Woof.

  34. jeffery
    Posted July 5, 2016 at 6:46 pm | Permalink

    With memories of Jan/Feb 1985 in mind, the BoE needs to do something to prop up sterling. A one-way bet on the foreign exchanges is feeding time in the piranha enclosure.
    ‘Benign neglect’ was tried in 1985, when it really was a dollar problem. But as the pound plunged towards $1, panic set in and draconian measures had to be introduced. One can argue of course, but the infamous Lawson boom 1986-88 might be at least partly attributed to (over) boosting the economy after that big shock.

  35. Christopher Hudson
    Posted July 5, 2016 at 7:06 pm | Permalink

    Everybody wants to see us fail. Whatever the cost, we had to get out now.

    • Know-dice
      Posted July 6, 2016 at 7:12 am | Permalink

      Yes, that’s the way I saw/see it – now or never…

  36. Christopher Hudson
    Posted July 5, 2016 at 7:10 pm | Permalink

    The problem with Theresa May is if you were to say to her, “Theresa, what do you plan to do about Mark Carney?” Her answer would be, “what do you mean?”

  37. Colin Hart
    Posted July 5, 2016 at 7:32 pm | Permalink

    Is it true that Mark Carney once worked for Goldman Sachs? If so, it would explain lot.

  38. Gary
    Posted July 5, 2016 at 7:55 pm | Permalink

    maybe the monetary chiefs cried wolf once to often in the past? Because the news is actually extremely grim, the “Three Largest UK Property Funds Freeze $12 Billion In Assets”.

    That is as serious as it gets, short of a bank run. The pound took another pounding again.

    Maybe this time Carney is correct to be grim?

    • Mark
      Posted July 6, 2016 at 9:56 am | Permalink

      The bursting of the property bubble has nothing to do with Brexit. It was already underway beforehand, triggered by Osborne’s tax measures. Even if he hadn’t imposed extra SDLT on commercial and residential properties, the bubble was probably not far off bursting anyway, regardless of other events. The failure was to allow the bubble to develop to the extent it has in the first place.

    • Denis Cooper
      Posted July 6, 2016 at 10:16 am | Permalink

      It can get a lot more serious than that! For example if a collective fund which invests in assets which are normally highly liquid is forced to suspend withdrawals. It has happened before with funds which invest in illiquid assets.

  39. Caterpillar
    Posted July 5, 2016 at 8:20 pm | Permalink

    Some balance and talking-up is definitely required. I doubt the Governor will be going anywhere, it will be interesting to see how the relationship with the Treasury develops with a new Chancellor. It does sometimes appear that the Governor wishes to keep himself in a policy area with which he is familiar, but the chances are that markets can pressurise him and that he will run out of policy places to go.

    Is it possible to get the Conservative Party Members’ election of a new leader completed before September? This is too long with the damage continuing to be done.

  40. John Robertson
    Posted July 5, 2016 at 9:39 pm | Permalink

    From a consultancy point of view this represents a positive, clients will need to be guided through this.

  41. Richard1
    Posted July 5, 2016 at 10:21 pm | Permalink

    If Theresa May wins as now looks likely she needs to change this policy of using EU citizens as a bargaining chip. I thought Vote Leave were clear in the campaign that there are international treaties (Vienna?) ensuring people can’t get treated in this way – either UK citizens in the EU nor EU citizens in the UK? Her position is very silly besides being immoral and it’s very suprising to hear liberal minded lawyerly types like Damian Green defending it.

    • Denis Cooper
      Posted July 6, 2016 at 10:11 am | Permalink

      Some time this afternoon:


      Until 8.00pm (if the 7.00pm Business of the House Motion is agreed to)

      EU nationals in the UK

      Jeremy Corbyn
      Andy Burnham
      Emily Thornberry
      John McDonnell
      Rebecca Long Bailey
      Dame Rosie Winterton

      That this House notes that there are approximately three million nationals of other EU member states living in the UK; further notes that many more UK nationals are related to nationals of other EU member states; rejects the view that these men, women and children should be used as bargaining chips in negotiations on the UK’s exit from the EU; and calls on the Government to commit with urgency to giving EU nationals currently living in the UK the right to remain.”

      I would vote for that, not primarily because of international law or the even the fear of retaliation against our citizens settled elsewhere in the EU or the fact that they would be missed in the NHS etc, but above all because it is not fair to cause these blameless people unnecessary worry.

  42. Richard1
    Posted July 5, 2016 at 10:26 pm | Permalink

    Why are we constantly being told on the one hand that the pound is too high (is it? It doesn’t feel very high to me) and on the other hand that the pound’s weakness is as a sign of the truth of Project Fear? I see no need for a cut in interest rates not more QE, but there is an urgent need for radical supply side reform. The next PM cannot afford to play tactically for marginal votes, he or she must go all out for the most rational measures and trust the Country to back them at the next election.

  43. Mike Wilson
    Posted July 5, 2016 at 11:04 pm | Permalink

    Somebody tell Gove to pull out. Some of May’s supporters will support him to get Andrea Leadsom out – and Tory party members will never support Gove after his recent performance. Boy, politics is so bloody devious.

    Cameron had no experience of high office when he became PM. Mind you … look at the job he has one … hmmm.

  44. petermartin2001
    Posted July 6, 2016 at 12:50 am | Permalink

    “That gives the government the option of a lower deficit or more money to spend.”

    Well no it doesn’t. Because, if the government spends less then its tax revenue will almost certainly be less too.

    The difference between what is spent into the economy , by government, and what is received back in taxation is simply what is save by everyone else, including our overseas trading partners, and that is largely (but not completely) oustside of government control.

  45. petermartin2001
    Posted July 6, 2016 at 12:57 am | Permalink

    “I have no problem with the Bank allowing banks to extend more credit to businesses and individuals.”

    Well maybe you should have a slight problem! We all need to borrow from time to time but should we use interest rates to try to control the economy the way we do? It is true that an initial relaxation of credit controls, in conjunction with a cut in interest rates, will create more spending power in the economy and create an economic stimulus. That is what is needed right now.

    BUT, it also creates increased levels of private debt in the economy. So after the spending money has been spent the debt still remains which depresses the economy and creates the requirement for yet another stimulus a few years down the track.

    So what then? We have negative interest rates and do away with cash?

  46. Original Richard
    Posted July 6, 2016 at 7:19 am | Permalink

    We need a Governor of the Bank of England who does not have a dilemma between saving his reputation for financial predictions and acting to enhance the economic wellbeing of the country.

    Also someone who has not been an employee of Goldman Sachs.

  47. McBryde
    Posted July 6, 2016 at 10:14 am | Permalink

    Clearly intended to create a response of seriousness and depression in the reader, the BBC website shows a dreadful post-apocalyptic character image of the City when reporting Carney’s comments.

    On a positive note, it seems to me that more and more people are catching on to the BBC’s reporting bias.

  48. JGD
    Posted July 6, 2016 at 11:01 am | Permalink

    From his arrival in the post, Carney has displayed an unprofessional tendency to stray into the field of politics.

    What we need….is a new Governor of the Bank of England.

  49. Ian B
    Posted July 6, 2016 at 11:58 am | Permalink

    We really cannot stand two months of this. Mr Cameron is still Prime Minister and should show some statesmanship by getting a grip and demanding that his fellow Remain enthusiasts stop talking the country and economy down before they do get us into a crisis. The political class in general need to grasp that they are on trial right now for their handling of the post-Brexit situation. We, the electorate, as the employers of the Parliament and Government, are not going to be shy to implement a performance review at the next General Election.

  50. Mecklenburgh2
    Posted July 6, 2016 at 5:08 pm | Permalink

    Is JR living in a parallel universe? All is NOT well. Property funds are suspending dealings, the FTSE 250 which as he well knows reflects domestic conditions is well down and consumer confidence is falling. Mr Carney is only doing what a responsible central bank should do, warning about risks and taking actions to ensure financial stability. The FTSE 100 is up but only because many of the largest companies are global businesses which just happen to be listed here and whose earnings are boosted on reporting by a lower exchange rate. As for gilt yields their decline reflects the $12 trillion of global bal bonds with negative nominal yields and the desperate need for yield from many global investors-as JR knows well. Those nearing retirement are at greater risk from these falling yields unless they take the opportunity provided by Mr Osborne to avoid simply lock those yields in by buying annuities. A fall in the pound does help our trade balance but only with a lag as import prices rise faster than export opportunities arise, an outcome well known to economists. The lower pound also raises inflation with a time lag. In short it is foolish to declere either victory or defeat for the economy because of the Brexit vote but the trend is currently not an encouraging one.

    Posted July 6, 2016 at 10:18 pm | Permalink


    I hear what you are saying. I feel however I must remind of the today’s date: 6th july 2016. Also the date of the Leave result: 24th June 2016. That is, less than two weeks ago.

    It’s only 2, 3 or maybe 4 times as long as you should hang a pheasant,grouse, partridge or goose. A red deer can be hung for 2 weeks I hear.

    If you take a look at the American stock exchanges say after the first week of December and ask who is buying and selling you will hear that many stock dealers and market makers have gone on their Christmas holidays and will not return until well into January unless they’ve met someone.

    Plenty of time yet for contrary results.

    I should take over the Governorship of the BoE but cannot afford the drop in remuneration and street cred.

    • Mecklenburgh 2
      Posted July 8, 2016 at 6:06 am | Permalink

      Christopher Houston. I agree ,far too soon to declere an outcome either way which is what Mr Redwood was trying to do for overtly political reasons. BTW June retail sales the worst for 10 years and commercial property funds in disarray.

  52. Lindsay McDougall
    Posted July 7, 2016 at 1:30 am | Permalink

    Why are Messrs Osborne and Carney proposing special action at all? It just isn’t necessary, indeed it is DEstablising. The markets responded logically to forthcoming Brexit logically – FTSE 100 up because of the prospect of trade outside the EU, sterling down to make new exports happen, FTSE 250 slightly down because these smaller companies do not export so much.

    The measures taken by Messrs Osborne and Carney will boost inflation and nothing else. As a result, sterling has fallen further. Are they actively malevolent or are their heads just full of neo-Keynsian nonsense?

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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