The Bank of England’s forecasts

The Governor mainly seeks to forecast the Bank’s future actions on interest rates. He decided as Governor that his unique contribution to the role would be public forward guidance of what the Monetary Policy Committee might do, so we would have a better understanding of what might happen next. We were told we would have fewer pleasant or unpleasant surprises.

We learned that rates may rise once unemployment fell below 7%. It duly fell below 7% and rates stayed unchanged. It then fell to 4.9%, so they cut rates.

We learned that rates might have to go up once real wages started to rise. Real wages soon after started to go up, but again rates stayed the same and were later cut, against a backdrop of continuing rises in real wages.

We heard that they might have to increase rates around the turn of 2016. Here we are nine months into that fateful year, and rates are now lower, not higher.

They told us there could be a recession or sharp slowdown immediately after a vote to leave the EU. The Bank has now put up its forecast for Q3 after the vote to show some growth after all.

Far from being unreliable, the Bank is remarkably reliable. It is a contrary indicator of what might happen next.

The question we might ask, is why is the Bank so often wrong in its guidance or forecasts?

There are two possible explanations. One is the institution is just bad at it. They made honest stabs at prediction, but lack the Mystic Meg touch.

The other is they got too close to the Treasury and the government’s Project Fear.

It would be good if the Bank would tell us which it was. We are I think due some explanation of the erratic progress of the forecasts. The only way to start getting forecasts right is to admit when you get them wrong and understand why.

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115 Comments

  1. Richard1
    Posted September 21, 2016 at 5:16 am | Permalink

    Specific predictions are always dangerous as Hayek and others taught us, given all the variables with so many independent economic actors.

    Economic policy and capital markets everywhere are distorted by central bank policy. It cannot be a good thing. Meanwhile I’ve hardly heard a squeak out of Mrs May or Mr Hammond, perhaps I’ve missed it, but it would be good to get some sort of sense of direction for policy at some point before too long.

    In the meantime I think we underestimate what must surely be the biggest threat of all – the small but non-zero probably of the election of a bunch of terrorist supporting Marxists if the Labour Party were ever again to win an election, now Corbyn and his henchpersons appear to have completely taken over. 30 years late, the Militant Tendency has won.

    • Lifelogic
      Posted September 21, 2016 at 6:01 am | Permalink

      An indication (at the very least) of a sensible direction of travel from Mrs May and Mr Hammond is long over due. Are they real Tories and just more Cameronite Libdims?

      The bonkers Hinkly C decision suggests the latter.

      What is Hammonds view on Osborne’s ratting over the £1M each threshold for IHT or his 15% stamp duty rates, or his landlord and pension pot muggings for example?

      • Hope
        Posted September 21, 2016 at 3:13 pm | Permalink

        Despite the continuance of project fear, today’s survey still shows the oublic want to leave the EU!

        ONS still using scaremongering language no major effect, as if to suggest there has been some effect and might be some in the future. I would suggest scraping the public fnded unit as it has become political and wrong in crucial forecasting. Radical overhaul of BoE for similar reasons.

        • acorn
          Posted September 22, 2016 at 3:33 pm | Permalink

          Hope, probably best if you post when you are sober. The ONS does not forecast anything; the OBR does the forecasting. The ONS references the OBR data, if it gets close to forecasting anything.

    • Hope
      Posted September 21, 2016 at 8:00 am | Permalink

      I am not into banker bashing, but it is high time they were stopped being helped by the govt at the expense of the prudent savers. Green making noises pensioners will be hit after the next election. Pensioners should take this as a warning not to vote Tory. Eight years of punishment should have been enough to line the pockets of greedy bankers, but no, this continues without any substantive changes since the 2008 crash. A bit like the false claims and lies to clean up Westminster.

      Why is your govt determined to punish savers, strivers and pensioners,yet continue to help enrich the feckless? The balanced deficit promised last year then by 2020 abandoned, overseas aid wasted hand over fist £2 billion given to the EU to waste on things like mating programmes for tropical fish, exotic dance classes, lunacy of HS2 and energy policy, cost of water increases faster than flooding that is not dealt with. Shut down DfiD it is of no use to the taxpayer.nwe could save £14 billion in overseas aid plus the cost of the department helping to reduce public spending. Business dept could be shut down as could the useless Environment Agency where most of its budget goes on staff costs!

      Make all directors and board members of banks personally liable and watch the risks curtail overnight with a cursory look from the BoE. Carney should be sacked for his poor judgement and forecasting. He is always wrong.

    • Mitchel
      Posted September 21, 2016 at 9:32 am | Permalink

      “…small but non-zero probability of the election of a bunch of terrorist supporting Marxists…”

      If we have another global crash in the next few years,which I continue to believe to be quite likely,it is entirely possible enough people will reject the centrist parties and their broad economic concensus for this to happen.

      Jeremy Warner’s article in today’s Telegraph “Get ready for the mother of all share market crashes once the central banks stop printing money” shows the desperate measures being taken by central bankers in the West.

      I’ve been pondering recently about how the original Marxist thinkers envisaged their ideas being put into practice in a highly industrialised economy,specifically at the time Germany,but in the event the great experiments (Russia,China,Cuba,Vietnam,various African states)took place in largely agrarian societies and were rejected by the highly industrialised nations.But in a post-industrial landscape which much of the West now resembles……?

  2. Lifelogic
    Posted September 21, 2016 at 5:28 am | Permalink

    Well clearly they were very much part of Project Fear why on earth is Carney still there and indeed what has Osborne not done the decent think like Cameron and crawled into a hole.

    Tim Farron yesterday:-

    “There is a hole in the centre of British politics right now for a rallying point for people who believe in the politics of reason, of evidence, of moderation…”. Well perhaps there is but this is not something the Libdims have ever provided.

    Reason and evidence says:- get out of the EU, have free trade with the world, freedom, to have smaller simpler taxes, cheaper on demand energy, no climate alarmism religion and a smaller government that mainly gets out of the way. Reason and evidence prove this works.

    But this is the opposite of Liberal Democrat agenda, with their satirical party name. They are neither Liberal nor Democrat indeed they wanted to bury democracy in the EU just like Cameron, May, Osborne, Carney and over half the Tory MPs did.

    We saw how exactly how popular the Libdim policies were at the last election. Their policies largely remain the same under Farron.

    • Richard Butler
      Posted September 21, 2016 at 1:44 pm | Permalink

      The centre ground is now extreme and much it does is at the expense of what ordinary folk regard as just and fair.

      To give an example (identification removed ed) was complaining she cannot get carers to attend after 7pm and that this impacts her social life choices.

      The centrist virtue signallers in the audience were aghast that she is not getting her ‘natural entitlement’ to even more state resource at her beckon call.
      Most right thinking people would consider this pushing our sense of British fairness way beyond the boundary.

      It’s as if good old British dignity and making do (whilst still enjoying considerable state aid, far more entitlement than most in the world enjoy) have been replaced by this insipid toxic entitlement culture where the Universe revolves around these heart string pulling individuals for whom no amount of resource is enough

      Centre politics as come to represent all that is at odds with natural fair play thus extreme.

  3. Freeborn John
    Posted September 21, 2016 at 5:29 am | Permalink

    It is pretty obvious that the Bank of England is not really an independent central bank. Carnie is the most political of central bankers hand-picked at great expense too the country by George Osborne for that very reason. All his predictions have been made with an eye to the politics which is why they so rapidly turn out to be wrong. It is bizarre right now that we have the greyest man in politics as Chancellor and a rock-star Bank of England Governor. Maybe they should swap jobs?

    • Lifelogic
      Posted September 21, 2016 at 6:05 am | Permalink

      Is Hammond still around? Where & why is he hiding? Could he not at least say something positive to show he is actually a real Tory?

    • StevenL
      Posted September 21, 2016 at 11:45 am | Permalink

      I’ve always assumed he was just trying to hoodwink people into fixing their mortgages as a way of keeping the banks more solvent. Keeping the banks solvent is kind of his job. He has no consumer protection remit.

  4. Mark B
    Posted September 21, 2016 at 5:29 am | Permalink

    Economic prediction is an art not a science. Much like the climate alarmists, if they start out with an answer already prepared in their heads, you will only end up asking questions that will fit

    • Jerry
      Posted September 21, 2016 at 12:59 pm | Permalink

      @Mark B; Indeed, only trouble is, what you say about economists is even more true for politicos and political bloggers -if they start out with an answer already prepared in their heads, they will only ever seek answers that will fit- I give you the writing’s of one Mr Lifelogic of this parish as evidence!

      Many on this site appear to hate Mr Carney for one or more of the following reasons; 1/. he was appointed by Mr Osborne; 2/. he doesn’t say what they want to hear, 3/. because he is not necessarily so very wrong; 4/. he seems to have an economic beliefs that are somewhere between the teachings of Friedman and Keynes (in other words, in the 1980s parlance, he is considered a “Wet”).

  5. Posted September 21, 2016 at 5:39 am | Permalink

    Wonderfully understated, Dr Redwood. In response to your question about the 2 possible answers :
    1. One is the institution is just bad at it.
    2. The other is they got too close to the Treasury and the government’s Project Fear.

    Answer: Both of the above.

    We’ve consistently called for the Canadian Governor of the Bank of England to consider his position. However his recent statement to the Treasury Select Committee that he is ‘serene’ about the Bank’s performance suggests he’s not going anywhere soon, unless pushed.

    On a separate note, we have some news pieces on Merkel’s migration difficulties, EU passporting rights (Moody’s), and Italy’s ongoing woes, which your readers might be interested in.
    http://facts4eu.org/news.shtml

    • Denis Cooper
      Posted September 21, 2016 at 6:55 am | Permalink

      http://www.telegraph.co.uk/opinion/2016/09/19/letters-the-royal-yacht-could-play-a-vital-role-in-drumming-up-t/

      “SIR – I was deeply concerned by your report that Italy is braced for thousands of migrants crossing the Mediterranean.

      It has been reported that Libya is a “failed state”, and it should be treated as such. Its territorial waters – extending for 12 nautical miles from the shore – should be discounted, allowing the ships of the “collecting” nations to approach the coast and prevent the dangerously overloaded boats of migrants from putting to sea.

      At the moment, all these ships can do is collect the migrants and transport them to countries such as Italy, where they are confined in camps before being processed.

      Jack Phillips
      Dedham, Essex”

      Processed, and in most cases sent on their way to other countries.

    • Denis Cooper
      Posted September 21, 2016 at 9:51 am | Permalink

      In view of the near-hysterical front page story in the FT today it would be quite interesting to know whether the Tory MP Mark Garnier can produce any evidence to support the second claim he made here:

      http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/the-uks-future-economic-relationship-with-the-european-union/oral/34853.html

      “Professor Miles: I have one very small point. It is sometimes worth remembering that the great majority of people who work in financial services in the UK are not doing anything to do with the rest of Europe. I am not sure exactly how many people work in financial services, but it is probably above 1 million. There are probably 350,000 or so in London.

      Mark Garnier: There are actually 2.2 million in financial services.

      Professor Miles: The proportion of people who sell financial services to the rest of Europe, in some sense, is probably a very small proportion of that. Now, they may be people who are very highly paid and, therefore, from the point of view of tax revenue, it is a slightly different story. In terms of numbers of people, I suspect it is a rather small proportion of those.

      Mark Garnier: It would be in the tens of thousands, if that.”

      Even if the present “passporting” arrangements could not be maintained, and no satisfactory alternative arrangements could be made – which is unlikely, given that “more than 8,000 financial services companies based in the EU or the European Economic Area also rely on single-market passports to do business in Britain” – just because “5,500 UK-registered companies rely on “passports” to do business in other European countries” that doesn’t mean that the volume of such business is a large proportion of their total business in all cases, or that huge numbers of people depend upon such business for their jobs. So he may be right that at most it would be “tens of thousands”, but it would good to see that substantiated.

    • Timaction
      Posted September 21, 2016 at 3:18 pm | Permalink

      Indeed. Carney should have been sacked or required to resign ages ago. A total menace and anti British/pro EU to the core. All for his own personal interest.

  6. Christopher Hudson
    Posted September 21, 2016 at 5:57 am | Permalink

    To be fair, they’re just following the Fed

  7. Roy Grainger
    Posted September 21, 2016 at 6:05 am | Permalink

    “There are two possible explanations. One is the institution is just bad at it. They made honest stabs at prediction, but lack the Mystic Meg touch.The other is they got too close to the Treasury and the government’s Project Fear. ”

    You overlook the third possible alternative John which is “both of the above”.

  8. Gary
    Posted September 21, 2016 at 6:11 am | Permalink

    Velocity of money has collapsed, more borrowing must pick up the slack. So rates are slashed. And the result will be more capital destruction, slower velocity and more rate cuts..

    They are stuffed.

  9. alan jutson
    Posted September 21, 2016 at 6:46 am | Permalink

    Just like a computer, if you put rubbish in, you get rubbish out.

    Clearly either the forecasting programme/model is wrong, or the information gathered to put in the system is faulty or incomplete.

    Like so many so called wonder systems used today, most do not take account of human nature or behaviour.

    So many Chancellors in the past have failed to take account of human nature/behaviour, it seems the Bank of England Governor has now joined the Club.

    • Lifelogic
      Posted September 21, 2016 at 2:41 pm | Permalink

      Some things (indeed most things) are simply not predictable even with the best computer models. We simply do not know when (for example) a serious war will break out, a large meteor will impact, a volcano erupt, a major accident occur, a technical innovation (like micro electronics) will take off or a dramatic genetic variation of say a bacteria or virus will occur.

      Life is not fair and not that predictable, people surely just have to get over it and get on as best they can.

  10. Gary
    Posted September 21, 2016 at 6:52 am | Permalink

    Velocity has collapsed

    https://fred.stlouisfed.org/series/M2V?_e_pi_=7%2CPAGE_ID10%2C7118388237

    Debt saturation and consumer retraction causes existing debt to become unservicable. Pressure on banks requires more rate cuts.

    The money-as-debt economy is reaching it’s natural end.

    • Denis Cooper
      Posted September 21, 2016 at 12:15 pm | Permalink

      According to that chart is has been collapsing since Q3 1997!

  11. formula57
    Posted September 21, 2016 at 7:17 am | Permalink

    The Bank’s QE policy needs (it seems to believe) the corollory of low interest rates but extra justification is required so we are treated to the forward guidance nonsense. It was never credible that in the circumstances prevailing an unemployment rate would be the trigger for an interest rate change and so the Bank should be encouraged also to explain why it came up with such incredible pseudo-justifications.

    If the Bank begins to lack authority, and that must be ebbing since, as you say, in its forward guidance it is a remarkably reliable contrary indicator of what might happen next, then its ability to do its job will be harmed, clearly.

  12. Gary C
    Posted September 21, 2016 at 7:19 am | Permalink

    Mr Carney is . . . . . . . . . Overrated, overpaid, over here and long past his best by date, he should go.

    • Jerry
      Posted September 21, 2016 at 1:15 pm | Permalink

      @Gary C; In other words, Mr Carney doesn’t do as you wish…

  13. Bert Young
    Posted September 21, 2016 at 7:37 am | Permalink

    Bring back an English Governor who , at least , will have more background of this country .

  14. Ian Wragg
    Posted September 21, 2016 at 7:47 am | Permalink

    Carney is a complete (unflattering word left out ed). He should be at the fairground charging half a crown for horse racing predictions.
    My economic forecast is as valid as his

    • Jerry
      Posted September 21, 2016 at 1:28 pm | Permalink

      @Ian Wragg; “My economic forecast is as valid as [Mr Carney’s]”

      Wow, you have got about, not only apparently a RN (nuclear power) engineer but you also now tell us that you have a bachelor, masters and doctoral degrees in economics -never mind from where or at what level, truly amazing, were did you find the time, correspondence courses whilst under the North Atlantic perhaps?!…

      • Ian Wragg
        Posted September 22, 2016 at 7:09 am | Permalink

        Very droll. At least I’ve seen most of the world during my 55 years working.
        Unlike our career political class and do Gooders we can see the bleeding obvious
        Yes I did spend 9 years at sea doing my training at HMS Vulcan Dounreay in 1966.
        Again I assert that my predictions are equally valid. I won9£40 o Brexit.

    • Bob
      Posted September 21, 2016 at 3:11 pm | Permalink

      “unflattering word left out”

      That’s okay Mr Redwood, I used to quite enjoy watching Blankety Blank.

      I’m sure we can all guess what the missing word is.

  15. The Meissen Bison
    Posted September 21, 2016 at 8:05 am | Permalink

    Under Mark Carney, and however serene he might feel about it, the BoE has taken on a political mantel which suits neither the institution nor the function it’s designed to fill. With the welcome departure of George Osborne from No 11 and the beginning of a new chapter in his life in which a high-viz tabard is finally justified, a swift change at the top in Threadneedle Street is also indicated.

    • Jerry
      Posted September 21, 2016 at 1:35 pm | Permalink

      @TMB; You mean back to the old school ways, when who ever occupied N0.11 could use BoE policy as their own political tool, such as change interest rates on a whim or the lead up to elections and the such, days when the BoE took on (even more of) a political mantel which suited neither the institution nor the function it’s designed to fill even less.

  16. Antisthenes
    Posted September 21, 2016 at 8:13 am | Permalink

    Forecasting is a very chancy business ask any gambler. In the end it is as much down to luck as skill if that which is predicted is that which actually occurs. Making assumptions on future events is useful but only if those doing those calculations have the skill, relevant historical data, intellectual capacity and do the calculation with total impartiality. In the unlikely event that all those conditions are met success is not assured. So forecasts should never be used in isolation in decision making and not at all when alternative more precis means are available.

    The BoE role of setting interest rates and the level of money supply is one such example of where incorrect means are being used in how they are decided. The correct way is to use the skills of those who know how much money they need and at what interest they are prepared to pay to acquire it. Those are the consumers and producers of the nation who have perfected the art of decision making through the mechanism of the market place.

    There is no reason why interest rates and money supply cannot apply the same mechanism except one the ruling elite would not like it. They would not like it because they wish to control our behaviour and non intervention in any part of the system governments past and present have set up would mean the need of curtailment in all interventions. That would never do. The people deciding their own life choices and affairs is a total anathema to politicians.

  17. newmania
    Posted September 21, 2016 at 8:18 am | Permalink

    Yeesh Carney must just detest you. Its like this ; due to some bizarre collision of inchoate rage and ignorance we have abandoned a nice safe Ocean liner and chosen to fling ourselves into the sea in a small raft , in the hope of reaching a delightful Island containing such priceless fruits a “ sovereignty”, they are, in fact ,inedible but look rather ornamental .We are assured will be vast improvement , not least because a small number of foreign people we didn`t like are not invited .
    Half the people hated the idea from the start , the rest are too stupid to know what they agreed to but the architects of this plan insist on telling us that as we have not sunk, it’s a great success.
    The reason we have not sunk is that able seaman Carney is busily throwing the water out and blocking the hole only to be told, by a drawling know all, (let us call him John Redwood) , that he is bring everyone’s spirits down with his efforts . Able seaman Carney can hardly swipe the sweat from his brow before this Redwood character starts complaining and telling everyone the boat would float quite well without him.

    etc ed

    Reply So why did consumer spending and stock markets rise before Mr Carney’s stimulus?

    • Denis Cooper
      Posted September 21, 2016 at 12:31 pm | Permalink

      Oddly enough the rescue ship Carpathia was about 17% of the size of the nice safe ocean liner Titanic, which is pretty close to the size of the UK economy compared to that of the EU as a whole …

    • Roy Grainger
      Posted September 21, 2016 at 1:29 pm | Permalink

      Your claim that the people who voted Leave are “stupid” is one of the more persistent lies peddled by the Remainiacs. I assume you are supporting Mrs Mays grammar school policy as your best way to remedy this ?

    • Jerry
      Posted September 21, 2016 at 1:49 pm | Permalink

      @JR reply; The problem is that we do not yet know if the economy is foursquare on its feet or if, to use another metaphor, the bounce we all saw after the initial post result market shocks was just might be called a “dead cat bounce”.

      Oh and before someone like Edward2 objects, yes I would be saying much the same had the referenda gone the other way and the markets had been initially spooked by the prospects of the UK joining the Euro as a result.

      • Edward2
        Posted September 21, 2016 at 9:34 pm | Permalink

        Why do you have to be so sarcastic and negative in your many posts Jerry
        Can’t you just make a post of your own with your own opinion rather than spend your time pedantically picking over everyone else’s.

        • Jerry
          Posted September 23, 2016 at 6:52 am | Permalink

          @Edward2; I guess the truth is uncomfortable for your Edward2, but if you really do know the future, pss, what’s the lotto numbers for a week on Friday (we can share the roll-over)?!…

          • Edward2
            Posted September 23, 2016 at 5:17 pm | Permalink

            Are we meant to take your opinions as “the truth” now Jerry?

          • Jerry
            Posted September 24, 2016 at 7:17 am | Permalink

            @Edward2; That is not what I’m saying and I can’t believe you do not understand this, so stop being so bl**dy argumentative!

            My point had nothing to do with my opinions, unless you are trying to claim that you do know what the future is going to bring, it is you (and others) who keep push opinion as a fact – ‘The markets will not be troubled by actual Brexit, we will get a trade deal with the EU27, Brexit will be a street paved with gold from day one’ sort of mystic-Meg style crystal ball gazing.

          • Edward2
            Posted September 24, 2016 at 12:20 pm | Permalink

            Jerry
            Please refrain from putting things in quotation marks which I have not said.

      • Edward2
        Posted September 22, 2016 at 7:00 am | Permalink

        A fourteen year record high in the output of the UK motor manufacturing industry of 110,000 vehicles, with record value exports.
        Up 10% on last year.
        Oh and before someone like Jerry comes on saying it is just a random happening and carps that most are foreign owned companiesI would have obviously promoted this excellent news whichever way the referendum result had gone.
        The more competitive pound has boosted export orders and resulted in more well paid employment opportunities and higher tax revenues for the Government
        Every cloud eh Jerry.

        • Jerry
          Posted September 22, 2016 at 3:55 pm | Permalink

          @Edward2; That was the (recent) past, when will you start accepting that.

          “output of the UK motor manufacturing industry of 110,000 vehicles”

          Still some way to go to equal the heady day of 1972 then, when the figure was 1.92m, which today (due to a much larger world-wide market and a greater number of adults of driving age with disposable incomes here in the UK) is probably equal to somewhere like 2.10 to 2.25m today.

          The SMMT stated, in a press release dated 21st Jan 2016; [my emphasis] “EU demand grows 11.3%, with 57.5% of exports destined for the continent“.

          What we need to remember about these ‘exports’ to the EU figures (post Brexit they truly will be “exports to the EU”) is that many cars are being assembled in the UK for or by manufactures who are either EU27 based or have deep and meaningful tie ups with such EU27 based companies – I won’t, without permission from our host, name them but I think most people know who they are. The decision to Brexit has changed the rules, quite literally, and as yet no one knows how these revised rules will pan out. We simply do not know how such companies will react, most have either shadow factories already or spare capacity, only two thing is sure, they will do what they have to to keep costs as low as possible, and they own nothing to the UK economy.

          The 110,000 production figure you cited above would be cut by more than half if EU exports stop (perhaps because production has been moved to a EU27 shadow factory), put it another way, in 1963/4 BMC produced 500,050 odd engines [1] of just one type alone, one company, one engine…

          Then people like you come along, without a clue as to the real history and try and tell us that ‘the UK motor industry has never had it so good’. 🙁

          [1] for fitting within the CAB environment, so does not include dealer service exchange units and such like

          “The more competitive pound has boosted export orders”

          Assuming that the above has not been off set due to the higher cost or imported raw materials.

          Reply Are you confusing monthly and annual output

          • Jerry
            Posted September 24, 2016 at 8:18 am | Permalink

            @JR reply; No I am not! 500,050 engines, in other words half a million cars pa. (that used just that one type of engine alone) were made by just one manufacture in 1963/4, moving on to the current SMMT estimated figures, something like 1,320m cars will be made in the UK during 2016/7, cutting that by the SMMT estimated 57% (cars that are ‘exported’ to the EU27) brings the 2016/7 pa. figure down to around 567,600 cars assembled for RotW exports and UK sales.

            So, in the early 1960s BMC alone -across its entire range of cars and car derived light goods- were making more than the total number of cars that are (likely) to be assembled, across all manufactures, here in the UK during 2016/7 that will either be sold here in the UK or exported to non EU27 countries – and that is the figure the UK car industry will be left with if the industry is hit by post Brexit EU import tariffs and manufactures shift production to tariff free EU27 factories.

            Probably nothing to do with Brexit but what devastating news to come out of Longbridge yesterday, and it just shows that tradition, history or even great skill and craftsmanship alone is not enough, bottom line economics and not sentiment rule today.

          • Edward2
            Posted September 24, 2016 at 8:48 am | Permalink

            You are confusing monthly and yearly output and forgetting that at its peak the UK car industry needed large subsidies from the State to survive.
            Today the industry makes very good profits
            It is not me who is living in the past Jerry.

          • Jerry
            Posted September 24, 2016 at 5:58 pm | Permalink

            @Edward2; No I am not, full reply made earlier to @JR, if/once it gets published;

            110,000 x 12 = 1.32m (hence my comment about 1972s full year figures of 1.92m), now halve that to get a ruff figure for those cars sold into the EU27, result -either way- is not many more than the total number my cited BMC engine production figures for 1963/4 … as I said, just one engine type, just one manufacture.

            Also you do not know your UK motor industry history do you… BMC in the 1960s, as was BLMC between 1968 and mid 1975, were private companies listed on the London stock exchange, BLMC (becoming “British Leyland”) was nationalised in mid 1975. Thus I’m not talking about the days of union strife, large state subsidies or political interference.

            Also, before gloating about profits, you might wish to check were such profits are banked, as well as were investment and R&D decisions are made and in which country IP rights are held.

            Unlike you Edward2, I do not despise the past, it is not about living in the past but understanding the past, anything will be all good and dandy if you only ever reference chosen bad years as a comparison, as you attempted to do with your “the UK car industry needed large subsidies from the State to survive” comment (that is factually incorrect, and quite a broad bush statement as incorrect ones go, Henry Ford [1st] will be spinning in his grave)…

        • Edward2
          Posted September 22, 2016 at 4:59 pm | Permalink

          Just to add the figure are monthly outputs.

          • Edward2
            Posted September 25, 2016 at 8:05 pm | Permalink

            You will be going back to the fifties next Jerry
            Every day was sunny back then.

    • Lifelogic
      Posted September 21, 2016 at 2:54 pm | Permalink

      Carney is once again wrong, wrong, wrong I suppose all that expensive education in economics, Harvard and Oxford, cannot help one see the reality. He really should go and preferably take his green wife with him. The abuse of his position in the referendum was only the final straw in a rather long list.

    • Anonymous
      Posted September 21, 2016 at 3:33 pm | Permalink

      Newmaniac – Whatever the cost of Brexit it was worth voting Leave just to piss you off.

      • Anonymous
        Posted September 21, 2016 at 3:47 pm | Permalink

        They definitely said the world would collapse the day after we voted Brexit.

        It hasn’t.

        It’s looking like your lot were wrong – no matter how hard they talk the country down.

        If Carney is having a problem (and lowering interest rates to deal with it – which is unecessary) then that problem originates from all this squealing from you, the BBC and all other Remainers.

        Whatever the EU is (and it is no safe Ocean liner) it is not a force for unity.

        It has you and I hating each other.

    • Timaction
      Posted September 21, 2016 at 3:42 pm | Permalink

      Indeed. All the predictions that the great and the good forecast has proven to be a wrong or lies. That said, there is some uncertainty going forward as negotiations progress. The loss of the value of the pound was a direct consequence of the remoaners predictions. What price our freedom, democracy, control of our borders, law making, fishing, agriculture all at no cost to ………..trade!?
      We have never given a mandate to a superstate and the elite, corporations and all the remoaners are in denial. Sup it up. We had over 45 years of your lies, manipulation and dishonesty on your true plans and intentions!

    • ian wragg
      Posted September 21, 2016 at 4:03 pm | Permalink

      What a load of crap from an arch remainiac.

  18. acorn
    Posted September 21, 2016 at 8:23 am | Permalink

    The Governor of the BoE nowadays reflects the requirements of the Bankers. The BoE embeds conservative neo-liberal requirements, such that a change of government towards the left, will have no impact on its ideology. As Neil Wilson highlighted at the time.

    Mark Carney, was questioned about the impact of Corbynomics on the economy by the Treasury Select Committee. He said: “The issue would be imperilling potentially the achievement of price stability. The consequence of that of course would be inflationary”. Which [Wilson thought] crossed a line he shouldn’t have – since that is a deliberate political statement.

    The last eight years have proved how ineffective monetary policy is, in a fiat currency system, when operated by a, so called, independent central bank. It is time to put the central bank back into the Treasury Debt Management Office (DMO) under the Chancellor / Chief Secretary to the Treasury. There are senior techies who can handle the job on a quarter of the pay. The BoE title should go and renamed the national clearing and settlement bank or similar.

    PS. Bill Black wrote a book, “The best way to rob a bank is to own one.” IMO, the best way to regulate the banking industry is for the government regulator to own a bank. Regulate from the inside not the outside. Nationalise RBS and cut our losses???

  19. Kenneth
    Posted September 21, 2016 at 9:26 am | Permalink

    IMHO global warming, infrastructure planning, the economy or Brexit all suffer from the same problem: they all rely on modelling and therefore a hefty dose of opinion and guesswork.

    No doubt the forecasters apply as much science as they can to the models but ultimately a big chunk requires ‘valued judgements’ which ultimately boil down to political judgements.

    The problem is that many of those who are providing opinions or commissioning others to provide such opinions are themselves in the public sector and have a ‘public sector’ view of the world, whether that’s the civil service, the BBC or scientists relying on public funds.

    • Lifelogic
      Posted September 21, 2016 at 2:59 pm | Permalink

      Try for example modelling lottery balls in a tumbler for say 30 seconds (even if you know all the shapes, positions, spins, weights, velocities …… ) it does not work for any significant length of time at all.

      Then perhaps move on and try the climate in 100 years or the economy in 100 years which is perhaps 10^1000000000….. more complex!

      • Lifelogic
        Posted September 21, 2016 at 3:00 pm | Permalink

        Not that it usually pays experts to actually admit they can predict so little.

  20. graham1946
    Posted September 21, 2016 at 9:57 am | Permalink

    The only thing Carney was ever going to do reliably is deplete the nation’s bank account of his huge salary, housing and living costs. Several of us noted that he would return to Canada richer, having achieved nothing of note and so it seems.

    He came from Canada, as he was lauded as a brilliant financial wizard by Osborne, who knew nothing as well, being dazzled by stardust of having an ex Goldman Sachs and Bank of Canada man in his team. He is long overdue a one way ticket to Canada for incompetence.

  21. Prigger
    Posted September 21, 2016 at 10:27 am | Permalink

    Mr Carney usually speaks to there being unanimity at the Bank of England. Rather rash paying salaries to all those people as just one seems to do nicely. It is all reminiscent of the old married couple appearing on the media celebrating their golden wedding anniversary “And we’ve never had a cross word in fifty years”. Do we ever believe them or assume one of them must have got stranded and lost for half a century on an uninhabited Pacific island during the war? We should all watch BoE employees to see if they ever eat coconuts.

  22. bigneil
    Posted September 21, 2016 at 10:31 am | Permalink

    I see Project Fear rolls on. The BBC reporting that old people will will suffer from a lack of carers who will be unable to come here because of Brexit.

    • graham1946
      Posted September 21, 2016 at 2:12 pm | Permalink

      I’m more concerned with what is actually going to happen to pensions after 2020, rather than the BBC rubbish.

      The politicians are already sowing the seeds of ‘The old have had it too good’, ‘The old are depriving the young’, ‘the pension has increased to much’ etc etc. Come the new parliament, the old will be stuffed (after they’ve been assured they won’t be of course, in order to secure their vote).

      • Bob
        Posted September 22, 2016 at 8:10 am | Permalink

        @graham1946

        “Come the new parliament, the old will be stuffed (after they’ve been assured they won’t be of course, in order to secure their vote).”

        Well, anyone with enough years behind them should be canny enough to see through the election promises, judge them by their actions not their words.

        • graham1946
          Posted September 23, 2016 at 10:03 am | Permalink

          Bob,

          It’s the triumph of hope over experience. If we did what you suggest we would not vote at all and many don’t. We just hope one day to get a government that govern for the voters. Naive, of course, but hope springs eternal.

    • Anonymous
      Posted September 21, 2016 at 3:38 pm | Permalink

      Bigneil – It isn’t actually Brexiteers asking for all-or-nothing immigration.

      It’s the Remainers in charge who throw their toys out of the pram and start barring everyone useful so they can say “Well you asked for it !” The same as Lefty councils who cut down street cleaning when we demand lower bills “Well you asked for it !”

      They know full well what we want.

  23. Ian Wragg
    Posted September 21, 2016 at 10:38 am | Permalink

    Just listening to the news and it was reporting that 193 countries have signed up to some initiative and I immediately understood what is wrong with the world.
    A whole 165 countries are not members of the EU
    There is no wonder that they are all backward and impoverished.
    Not having the political nous of Juncker to guide them or our Angelas population displacement activities to enrich them we can only sympathise
    How do they manage to exist at all without paying an annual tribute to Brussels.
    Surely everyone of them will be knocking on the door to join this dynamic outward looking fossilised organisation called the EU

  24. hefner
    Posted September 21, 2016 at 11:19 am | Permalink

    Interesting to see how an “old die-hard monetarist” criticizes BoE’s monetarist policies. How can one so easily forget Milton’s, Margaret’s and Ronald’s lessons?

    Reply I have always ben a pragmatist on these issues.

  25. ian
    Posted September 21, 2016 at 11:32 am | Permalink

    EX labour leader is thinking or going to try to make comeback to lead the 176 rudder a less and maybe soon to be ex labour MPs in parliament against the con party but has to fine a seat first and second in command will be the other ex leaders son of the 1970s to lead a new party for staying in the EU. Should be quit a laugh, more court action will follow, big business and the media will more than likely be in support of the new party to stay in the EU or otherwise he would not be thinking of making a comeback.

    etc ed

  26. Pete Stroud
    Posted September 21, 2016 at 11:32 am | Permalink

    I also seem to remember Osborne telling us that Carney was a highly talented man who would revitalise the Bank and improve on just about everything that previous Governors had managed to achieve. That was why it was quite justified paying him more than previous holders of the post, and giving him perks that no other holder of the post warranted. Clearly, this was just one more example of the ex chancellor’s poor judgement.

  27. ian
    Posted September 21, 2016 at 11:34 am | Permalink

    If he joins up with the BOE leader you done for.

  28. Posted September 21, 2016 at 11:37 am | Permalink

    Off- topic, a rather stupid article by Philip Johnston in the Telegraph today, praying in aid a rather stupid opinion poll carried out on June 23rd on behalf of Lord Ashcroft:

    http://www.telegraph.co.uk/news/2016/09/20/nigel-farage-needs-to-stop-telling-me-why-i-voted-for-brexit/

    His objective is to persuade readers that we should stay in the EU Single Market via EFTA and the EEA, and it doesn’t really matter that we would still have no effective control over immigration from the other EEA countries, including the EU countries, because in reality only a minority of voters want the UK to have that control:

    “Many Leavers could live with this outcome for the simple reason that a majority did not vote specifically on the issue of immigration, even if those who did almost certainly pushed the result over the line. The Ashcroft poll published shortly after the referendum showed that nearly half voted to leave so that decisions about the UK could be taken in the UK and only one third did so principally to regain control over immigration and borders.”

    And:

    “So if most people who voted in the referendum – 16 million Remainers and two-thirds of 17.5 million Leavers – were not motivated by a need to control EU immigration, why is the Brexit debate being driven by the search for a solution to assuage the views of a minority?”

    A couple of logical flaws here.

    Firstly, if Lord Ashcroft had offered me four alternative reasons why I had voted to leave the EU, as in Table 57 here:

    http://lordashcroftpolls.com/wp-content/uploads/2016/06/How-the-UK-voted-Full-tables-1.pdf

    I would have been one of the 49% of Leave voters who chose the first:

    “The principle that decisions about the UK should be taken in the UK”,

    on the assumption that this would include decisions about immigration policy; but apparently not, according to Philip Johnson I could only be counted as having any significant concerns about control of immigration if I had been one of the 33% who specified just that as their primary reason for voting to leave:

    “A feeling that voting to leave to the EU offered the the best chance the UK to regain control over immigration and its own borders.”

    In fact it’s more probable that the only Leave voters who were not too bothered about regaining control over immigration were most of the 6% who said that they voted Leave primarily because it would offer better trade prospects, and a minority of the 13% who were primarily concerned about uncontrollable EU enlargement.

    Secondly, the Ashcroft poll provided no evidence on the attitudes of Remain voters to immigration because he did not ask them about it, even indirectly; in Table 52 none of the four suggested alternative primary reasons why they had voted to stay in the EU related to immigration, and nor was there any attempt to explore how many people voted to stay in the EU despite their objections to unlimited and uncontrollable immigration. On the other hand, the first contributor in these Fabian Society papers:

    http://www.fabians.org.uk/wp-content/uploads/2016/09/FABJ4808_Europe_Report_130916_WEB_2.pdf

    cites an opinion poll in which it was found that:

    “In fact, 44 per cent of remain voters think it is essential that immigration is reduced, with only 20 per cent disagreeing.”

    So in truth we will have something like 90% of Leave voters, plus 40% of Remain voters, agreeing that it is important to reduce immigration, roughly 15.8 million plus 6.4 million = 22.2 million out of a total of 33.5 million, or two thirds, not as Philip Johnson pretends just one third.

    • Anonymous
      Posted September 21, 2016 at 3:50 pm | Permalink

      And Newmaniac telling us we’re worried about ‘a few’ migrants.

      The floodgates have opened from the third world and the passage is via the EU and Shengen.

    • Chris
      Posted September 21, 2016 at 4:35 pm | Permalink

      Would you consider putting R North right on this?

      Also, I understand that Arron Banks commissioned polling that identified how significant the immigration issue was (his was the only poll that predicted the referendum result percentages correctly).

      • Denis Cooper
        Posted September 22, 2016 at 6:43 am | Permalink

        Nobody can put R North right about anything, and anybody who annoyingly persist in attempts to do so are silenced …

        • Chris
          Posted September 22, 2016 at 9:31 pm | Permalink

          Head in sand syndrome, it seems.

    • Newmania
      Posted September 21, 2016 at 5:21 pm | Permalink

      90 % of leave voters did not know what the single market was so they hardly be said to have chosen to leave it . I don`t think anyone claims it will not be bad thing and yet the Brexit vote was told there was no down side
      I know it will seem comical but I gather many of them thought it would actually be a good thing and that the “extra money for the NHS” equation was quite literally true .
      Sad really .
      I agree with you that Brexit was based largely on whipping up xenophobic bigotry but I don`t know how deep these feelings really are . Let us imagine asking the typical Brexit voter if he would like less foreigners around ( and I am putting it as kindly as I can)
      ” Yus,…sright ” he would say scuffing a knuckle idly on the gutter ” Yus don`t like foriegners yus”
      “I see my good man and would you be happy to lose say 5% of your income if you could get rid of those pesky Poles Germans and what not ..lets say that fiver in your hand…..”
      ” Eeeeee gerroof … not vat bovvered am I ”

      Thats roughly the way it would go , unless you think people really did knowinglyt vote to be poorer because they hate foreigners at a deep and passionate level .
      Not my experience. For a slightly nicer house most of them would move to the EU …. and come to think of it they

      Reply Your comments are most unpleasant about Leave voters. I voted LEAVE after years of study and research and know exactly how and why I want us to leave. I have no dislike of foreigners.

      • Anonymous
        Posted September 21, 2016 at 9:56 pm | Permalink

        I think we were warned by a ratio of 10:1 not to leave the EU by politicians, experts and news outlets. Every TV panel was weighted 3:1 (including the presenter) against Brexit.

        It is rather inaccurate to say that the concerns about the single market weren’t explained (Nicola Sturgeon banged on about it incessantly)

        Remain had the BBC on side, for goodness sakes.

        There are absolutely no grounds for claiming that the Brexit vote were not told of the downsides. Where were you during these debates, Newmania ???

        Remain lost because:

        A) They didn’t explain things very well

        B) They were offensive to people (as you are now)

        C) They were wrong

        You lost.

        Still, you don’t fully understand why you lost (the main reason being a loathing of your hypocritical class, not foreigners)

        It is utterly delicious to see you being such a sore loser and still reeling from the smack on the nose we’ve given you.

        You have nothing to give back except badly written tantrums and unpleasantness and I have yet to read a Brexiteer who is as judgmental and strident in opinion as you are.

        • Anonymous
          Posted September 21, 2016 at 10:01 pm | Permalink

          PS, I voted Leave knowing that I could well be poorer. The cultural soul of my country is more important than money.

          • zorro
            Posted September 23, 2016 at 5:07 pm | Permalink

            I am sure that Newmania knows the cost of everything but the value of nothing….. You should feel pity for him as the endless torment and cognitive dissonance at losing to humble leavers drives him senseless ?

            zorro

      • Margaret
        Posted September 22, 2016 at 3:23 am | Permalink

        Have you recently been on a writing course? The trouble with these old fashioned modules for new writers or those attempting to re establish themselves is that they try shock tactics which don’t really offend as their motives are transparent.
        The truth is though, many did not and do not understand the ins and outs of financial matters as they have been getting on with their lives serving our Country , working hard and making money with tact and good sense .That does not make them stupid . When people choose a path in life ,they usually work hard to improve themselves in their career. This is why we rely on others to do their job effectively .We cannot know everything all the time.

        • Mitchel
          Posted September 22, 2016 at 9:27 am | Permalink

          Margaret,his comments,certainly the one above,read like he’s a stand-up “comedian”,trying out his lines to gauge reaction before unleashing them on his real audience.

      • Denis Cooper
        Posted September 22, 2016 at 6:52 am | Permalink

        Leave voters want to take back control, including over immigration policy. I suggest you read the Fabian Society papers where at long last it is accepted that the British people have a right to control immigration into their own country and accusations of racism and xenophobia are misplaced. If the other EU member states insist on their irrational linkage of trade and immigration through the Single Market then it follows that we cannot continue to be part of the Single Market. As the Single Market has only added something like 1% to the UK’s per capita GDP that will not be a catastrophe unless the other countries want to break the EU treaties and deliberately make it into a catastrophe, for them as well as for us.

      • Edward2
        Posted September 22, 2016 at 7:03 am | Permalink

        Have you spoken to all 17 million Leave voters Newmania?
        Or are you just guessing at their reasons for voting?

    • Ed Mahony
      Posted September 21, 2016 at 5:54 pm | Permalink

      ‘In fact, 44 per cent of remain voters think it is essential that immigr’ation is reduced’

      – Brexiteers have said practically nothing about how they’re going to reduce immigration from outside the EU, which is just as high as from within the EU.
      At least immigrants from the EU share the same culture as us and are more likely to return home than immigrants from further afield, whilst building up the rest of the EU is good for Europe’s overall prosperity, peace and security, affecting us in the UK in a positive way.
      There are obviously some great arguments behind Brexit. But the lack of substance / plan / vision / leadership in government from its Brexit representatives is a bit of a joke. And until leading Brexiteers in government show some real leadership soon, Brexit is going to end up a disaster.

      • Anonymous
        Posted September 21, 2016 at 11:08 pm | Permalink

        Ed M – Reducing EU migration is a step in the right direction and starting with white immigration proves it is not about ethnicity.

        The ‘plan’ is actually for everyone who enabled the EU Referendum Act to get behind and implement.

        That means 2/3rds of Parliament, the Lords and the Queen.

        Why ?

        Well if they weren’t prepared to accept the ‘wrong’ outcome then they should have stood against the referendum in the first place.

        That they didn’t means that they now have a duty (both moral and legal) to make it work and for it not be a disaster.

        It is most certainly NOT incumbant on merely three people hindered by a civil service which, by the way, also enabled the referendum to take place.

        • Anonymous
          Posted September 21, 2016 at 11:35 pm | Permalink

          MPs voted by 544 to 53 for the Referendum Act according to Wiki.

  29. Iain Gill
    Posted September 21, 2016 at 12:22 pm | Permalink

    Is it not simply that the government and their public sector, including the bank of England, regularly say one thing and do something completely different. The financial roadmap is no different to the immigration roadmap, and so much more, say one thing and do something completely and utterly different. Half of this stuff they don’t even believe or really plan to follow themselves as anyone who has been exposed to “chatham house rules” briefings from ministers will quickly spot they are telling the public something completely different to what they are telling business etc.

  30. Prigger
    Posted September 21, 2016 at 12:24 pm | Permalink

    The Paris based Organisation for Economic Cooperation and Development (OECD ) is full of economists. It has backtracked on its warning that the UK would have an immediate crisis after the Referendum vote. In other words it got it terribly wrong.
    It has now been swirling the tea leaves afresh around the cup and has a new reading. If you care to hear it then you will need to go to the nearest seaside resort and cross their palms with silver.

  31. ian
    Posted September 21, 2016 at 12:31 pm | Permalink

    Like i said a few months back, every time you have GE from now on, staying in the EU or rejoining it will be in some party manifesto as supports of the new world order which are big business, media, politician, lords, establishment, bankers, civil servants, councils, they will not stop till they have the shirt off your back with refugees running around all over the country.

    • Anonymous
      Posted September 21, 2016 at 11:15 pm | Permalink

      Ian – Bring it on. Make all candidates wear an EU badge if they are pro EU. If they are not proud to wear it then we must ask why.

      The public have not been paying attention and pro EU-ers have been quiet about their inclinations.

      This is why we have a large majority of MPs who are Europhile and a nation which is Brexit.

  32. Mick
    Posted September 21, 2016 at 12:47 pm | Permalink

    A little off subject but why do we have to hear the constant winging from the SNP about a second referendum on leaving the UK with the help of all the main stream media giving them airtime, I might be wrong but the only person who can give permission for a vote is the PM of the day, and that’s not going to happen, myself I would vote for them to leave the UK and spend all the Barnett money in England were it would be more welcomed

  33. BOF
    Posted September 21, 2016 at 12:57 pm | Permalink

    Did Mr Carney come in at so high a price that he is too expensive to get rid of? Never mind his ongoing first class, millionaire, rock star,non green, air miles at tax payers expense.

  34. Richard Butler
    Posted September 21, 2016 at 1:33 pm | Permalink

    For years I’ve argued that Economists fail (on big ticket predictions) for the following reasons;

    1) Herding instinct – if they all agree and turn out wrong, well so was everyone else

    2) Group – think, generally having been exposed to the liberal / left wing academic establishment ‘settled’ world view. The IMF’s evaluation office says one reason why the organisation failed to identify the mounting risks to the global economy (2007/8) was “a high degree of groupthink” and “an institutional culture that discourages contrarian views”.

    3) Like WW1 Generals and other lemon hierarchy’s, they rely on intelligence provided by detached lofty boffins that are not grounded in coal face realities – it is critical to recognise this major failure in British life that causes endless harm year in year out.

    4) Their heads are stuck in academia and graphs, they don’t spend nearly enough energy going out into the real world and getting a sense of true dynamics.

    5) Paint by numbers analysis – this linear rear view mirror methodology is far too crude and tells you little of the future

    I’ve found talking to builders, Estate Agents and Taxi drivers often reveals patterns and insights that go un-noticed by the great and good. By all means take note of the pie-charts and confidence indices, but don’t forget to get out there and get your hands dirty.

  35. Jack
    Posted September 21, 2016 at 2:10 pm | Permalink

    The BoE is always wrong because they fundamentally don’t understand how the monetary system works. Lower interest rates actually reduce demand and the inflation rate, but they base their entire framework on their false belief that lower rates and QE = stimulus when it’s the opposite.

    End this complete charade and fully renationalise the BoE, set the overnight interest rate to 0% permanently, and relegate monetary policy to backdoor operations where it belongs. Then the whole “paying the interest on the national debt” “problem” is gone and we can use fiscal policy to keep the budget deficit large enough to facilitate maximum output growth and full employment.

    • Denis Cooper
      Posted September 22, 2016 at 6:37 am | Permalink

      The BoE is already fully nationalised and cannot be renationalised.

      • Jack
        Posted September 22, 2016 at 4:29 pm | Permalink

        True, the BoE is owned by HM Treasury. Though by fully renationalise I’m referring to removing the BoE’s “independence”.

  36. Bob
    Posted September 21, 2016 at 3:05 pm | Permalink

    “Far from being unreliable, the Bank is remarkably reliable. It is a contrary indicator of what might happen next. “

    My thoughts entirely.

  37. David Smith
    Posted September 21, 2016 at 3:18 pm | Permalink

    Carney should be got rid of without delay, whatever the cost. He is bad news, seemingly only interested in pursuing a career in self promotion. I am sick of the man. His astonishing interventions have cost me a great deal of money since I am building a property overseas and after Osborne’s dire warnings I felt obliged to cash in my BP shares only to see them rocket after the Brexit vote. Brexit was a great result and I am willing to share some of the short term costs of this decision but what is not acceptable is the erroneous advice or market moving false predictions that have nothing whatsoever to do with Brexit. They should be made to keep their cake holes shut tight. Apologies for the bluntness but I am very angry.

  38. Ronald Olden
    Posted September 21, 2016 at 4:52 pm | Permalink

    This is the worst Governor of the Bank of England I have ever observed. He obviously must have some skill at something but he should be removed from anything to do with Monetary Policy and given some specific job relating to regulatory supervision.

    I remember commenting at the time he made the 7% unemployment comment, that it was the sort of nonsense you might expect from an O Level Economics pupil in the early 1970s. No-one since the mid 80s has seriously argued that a specific Unemployment target should the determinant of the level of interest rates.

    We have recently received a big new monetary stimulus from the Bank of England, most which has not yet had chance to work. The actual data now suggests that the stimulus might not have been necessary anyway, and in any case we already had a big devaluation to fall back on. Yet the Governor is now speculating on the likelihood of cutting interest rates even further. There is already the real risk of a jump in Inflation.

    Anyone relying in Carney for interests rate ‘forward guidance’ is risking losing their shirt.

  39. Ed Mahony
    Posted September 21, 2016 at 5:59 pm | Permalink

    Let’s be clear: the short-term after Brexit is pretty much an irrelevancy. In fact, it could turn out to be a real banana skin to slip on, giving Brexiteers a false sense of confidence.

    What really matters is the long-term, and remarks such as those by the Japanese government, always against Brexit, but who now say that hard Brexit would be bad economically for the UK. This isn’t at all surprising. Governments and economists and businesses around the world have been saying this for months. What is more surprising, and concerning, is the way leading Brexiteers in government seem to breezily brush off such comments, and think that with a bit of wishful-thinking, bluster and bravado they’ll be able to get what they want.

    • Anonymous
      Posted September 21, 2016 at 11:22 pm | Permalink

      So the truly monoculturalist Japanese government can tell us that we must be overrun with migration, ruled from Brussels, submit to QMV, obey directives and regulations and accept EU control of our borders.

      We’re not breezy about this but it clearly isn’t a friendly trade arrangement we’re talking about here so much as intimidation.

      • Anonymous
        Posted September 21, 2016 at 11:25 pm | Permalink

        A UK based Japanese factory is not good to us if it generates, say, 3000 jobs but the clause is that we must open ourselves to 3 million poor and uneducated migrants.

        We would be financially better off without that factory.

        You fail to factor in the hidden costs to the economy.

        • Denis Cooper
          Posted September 22, 2016 at 6:33 am | Permalink

          Correct.

          The Japanese want us to do what they will not do themselves.

  40. Vanessa
    Posted September 21, 2016 at 7:00 pm | Permalink

    The Governor obviously hasn’t a clue. He trashed Canada’s economy and now is over here trashing ours. What is his attraction to you politicians? Surely there is an Englishman more capable of keeping our economy on track and telling us what is going to happen and how he is going to deal with it.
    The sooner he is sent back to Canada to do another hatchet job on their economy rather than ours the better. The man is an idiot.

  41. Margaret
    Posted September 21, 2016 at 7:11 pm | Permalink

    Losing face doesn’t like the hat it wears. Blanked out reality and forecasts are easier to deal with if you pretend . There is always that shakey uncertainty that it hasn’t happened yet. Yep.. Fear I suppose. Paranoia makes the world go round?

  42. Prigger
    Posted September 21, 2016 at 8:16 pm | Permalink

    Listened to Rt Hon Dr Julian Lewis MP on TV http://www.parliament.uk/business/committees/committees-a-z/commons-select/defence-committee/
    Like a Klingon talking posh. Have persons such as he ( extremely intelligent and patriotic to the nth degree ) any idea at all how they sound to persons trying their utmost to integrate into British society? Send this patriot and he is, to retirement! He is an obstacle to peace. He is everything I love about my country. And our enemy. Go figure !

  43. Prigger
    Posted September 21, 2016 at 8:35 pm | Permalink

    “We are content with the Iraqi government”…Rt Hon Dr Julian Lewis MP today on TV.”
    One must necessarily not look to the internet to the “radicalisation” of muslims in the UK. If WE the British were muslims in the light of Mr Julian Lewis’s counsel… should we fight? A rhetorical question. Retire the oaf! Patriotic for all that.

  44. Sir Joe Soap
    Posted September 21, 2016 at 8:51 pm | Permalink

    Well he reminds me of a car mechanic who might recognise all the parts of a car engine, be able to put them together in roughly the right order, but when it comes to driving he neither knows the destination nor how to get there.

  45. Lindsay McDougall
    Posted September 22, 2016 at 2:24 am | Permalink

    There’s an obvious corollary to this. The current Governor is either incompetent or malevolent, a fool or a knave. So why hasn’t he been sacked?

    You have a new Prime Minister and a new Chancellor of the Exchequer. It is the ideal time to press for dismissal. Of course, it would be far easier of both of these positions were filled by Brexiteers, but you all funked the leadership challenge.

    Be assured, if you want a hard Brexit, political blood will have to be spilled. At the very least, Brexiteers should be gunning for the Governor and the Home Secretary.

  46. hefner
    Posted September 22, 2016 at 2:07 pm | Permalink

    It is interesting to see how many people are suspicious of forecasts. However on a large number of topics, it is essential to get some prediction for decision making, and most of us, I am sure, do forecasts without realising that’s what we do, whether it is how long it will take to travel by car through a place in town, how much a pension pot might grow to ensure a reasonably comfortable retirement, how many will vote for whatever party in next general elections. Weather forecasts up to three days are generally good and provide useful information to five days.
    Whether forecasts involving simple systems are likely to be generally correct, forecasts involving people and their aggregated actions are bound to be simply a representation of one among various possible outcomes. The question next is how divergent are these various possible outcomes. One way to test for such potential divergences is to get as large a number of people knowledgeable on the matter at hand to be asked and produce sets of forecasts with initial conditions as close as possible to “commonly accepted reality” and encompassing various assumptions/representations of the processes likely to be determinant to the result.

    As an example, I found rather comforting to see forecasts from BP, Shell, and the International Energy Agency for the next 35 years (to 2050) roughly on the same conclusions: climate change is happening now; the link between energy use and GDP growth becomes even more disconnected in OECD countries, but keeps being very strong in developing countries, particularly China and India; in OECD countries, coal use is mainly on a rapid decrease, oil and gas use are mainly steady or slightly growing; Renewables (including nuclear) starting from near zero will grow but wind/solar are unlikely to go over 10-12 % by 2050. In non-OECD countries, coal, oil will very slowly be replaced by gas, with renewables (mainly solar) appearing for essentially small-scale domestic consumption.
    All three reports are expecting an (some) advance in Carbon Capture and Storage, and wind/solar energy storage in the coming 15 years.

  47. Ken Moore
    Posted September 23, 2016 at 10:07 am | Permalink

    I would be interested in Mr Redwood’s view on how ‘independent the OBR really is?.
    Can we just drop the ‘independent’ bit and take their figures with a large bag of salt…

    George Osborne who set it up was hardly a paragon of honesty and integrity while in office….

  48. helen jones
    Posted September 29, 2016 at 8:26 pm | Permalink

    Carney is hell bent on only one aim to ensure that every saver and especially every pensioner reliant on savings income lands up in the workhouse
    Having got rid of Osbourne i am at a loss to know why Theresa has not sacked Carney too but then her husband is a banker and it seems that Theresa pledge of for everyone not just the priveledged few is a lie.
    My life has been wrecked by low interest rates because i was a carer and only get £70 state pension so the interest from my savings was vital to pay the mist basic bills

    i have 2 choices…starve or blow the lot and then claim pension credit and every benefit going ….maybe when others like me do the same the country will wake up to what Carney has caused …a massively increased welfare bill

    Reply Mr May is not a banker.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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