The Bank of England twists and turns

I thought the interest rate cut some weeks after the Brexit vote was needless last summer. The economy was speeding up at the time, credit growth was lively, house prices and home building were on the up, new cars sales growing strongly and unemployment coming down. The Bank had all the wrong forecasts , arguing that unemployment would rise, jobs would fall, house prices would fall and confidence would crash.  Instead of looking at the data the Bank trusted its own wrong forecasts and cut rates!

Yesterday the Bank did the opposite. The data shows house prices slowing, car sales falling, credit growth slowing and money growth retreating. The Bank should know that because it has deliberately brought it about by ordering a credit tightening under its macro prudential powers.  The latest retail sales figures, growth figures and house prices figures are showing much slower rates of growth than in the summer of 2016. So what does the Bank do? It puts rates up!

Its argument is s sloppy one. It says we are getting close to capacity, and cites the fall in unemployment. This it says requires a rate rise to bring inflation back to target though it has previously always said the inflation spike this autumn is a one off which will subside.

It is odd that the MPC in its explanation of the economy refers to Brexit several times and makes no reference to the Bank’s own monetary tightening, reduction of credit growth and tax attacks on housing and cars by the government. The Bank seems to have lost its impartial interest in the figures and gained an unhealthy wish to blame Brexit for anything adverse. If Brexit is such an all pervasive influence why doesn’t it get the credit for the strong jobs growth, the rise in housebuilding and the strong manufacturing performance over the last year?

If you look at a graph of car sales they rise strongly up to March 2017, with no effect from the vote or the Article 50 letter but a big effect from the budget and government statements on diesels. If you look at a graph of BTL investment you see it takes big hit in April 2016 before the vote when the government introduced big tax rises. I suggest people look at the evidence instead of trotting out alleged Brexit effects for bad news, and saying despite Brexit for good news.

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  1. Nig l
    Posted November 3, 2017 at 6:02 am | Permalink

    Yes, one has to question their motives, maybe more about their explanation and how people picked out the bits they wanted to hear. I am sure Carney said that the economy was growing faster than its speed limit. Ok, that view maybe too cautious, but are the Remainers now saying Brexit is overheating the economy as opposed to the previous dampening it down.

    If they spin round any quicker they will disappear up their own………………! Let’s hope do.

    • Lifelogic
      Posted November 3, 2017 at 8:45 am | Permalink

      I think their motives are rather clear – a misguided religious belief that the remaining in the EU is a good thing (for them) and that the daft (as they see it) voters should be just ignored. Most of the state sector, the BBC and academia clearly have this view. They (mainly) have a similar misguided views over climate alarmism, “renewable” energy, the dire NHS, state monopoly education and indeed the bloated state sector knows best attitude to everything. May and Hammond seem to be just as dire, we shall see in the budget.

      • Lifelogic
        Posted November 3, 2017 at 10:38 am | Permalink

        A small majority of MPs have this view too I suspect. All the parties were pro- remain in the referendum after all. The one think Corbyn had right all his life he changed his mind on.

    • Denis Cooper
      Posted November 3, 2017 at 9:30 am | Permalink

      I think he referred to the “new” speed limit, which apparently is only one point something per cent natural growth of GDP a year.

      Well, I recall Gordon Brown claiming that under his stewardship the trend growth rate of the UK economy had gone up significantly, but that proved to be another temporary deviation from the long term average of about 2.5% a year.

      Unless there is very good evidence to the contrary I will view the current growth rates in a similar light and will continue to expect growth to return to that kind of historical trend.

      “GDP Annual Growth Rate in the United Kingdom averaged 2.45 percent from 1956 until 2017, reaching an all time high of 9.70 percent in the first quarter of 1973 and a record low of -5.90 percent in the first quarter of 2009.”

      “For historians, the picture looks a little different. If we compare any single year with its neighbours, acceleration and deceleration are real enough. But compare one decade with another and a different picture emerges. Indeed if we look at Office for National Statistics figures for the year-on-year growth of the UK’s GNP from 1949 to 2016, booms and busts make little difference to longer-term trends. Macmillan’s consumer bonanza; disengagement from empire; entry into the EEC; the miners’ strike; Thatcherism; Blairism; globalisation: these things produced, at most, modest effects.

      “Background noise apart, UK GNP since 1949 has grown at about 2.5 per cent per annum, irrespective of the party in office, regardless of geopolitical events … ”

      In one respect it doesn’t matter much whether the future trend growth rate will be 2.5% a year or only 1.5% a year; in either case the economic effects of the EU Single Market have been marginal, with maybe around 1% added to UK GDP, and so at most equivalent to some months of natural growth of the economy.

    • Hope
      Posted November 3, 2017 at 12:38 pm | Permalink

      I read mortgage increases 0.25 percent passed on but savings only increased in some cases by 0.015 percent. Why?

      • Lifelogic
        Posted November 3, 2017 at 2:44 pm | Permalink

        Zero real competition in banking yet another reason for low productivity in the UK – Too many barriers to entry, too much red tape – where are the competition authorities here and what is Carney doing about it?

        • Lifelogic
          Posted November 3, 2017 at 2:45 pm | Permalink

          Cut out the rip off banking middle men seems to be the best policy.

      • hefner
        Posted November 3, 2017 at 4:11 pm | Permalink

        Were you really expecting anything different?

        • Hope
          Posted November 4, 2017 at 10:23 am | Permalink

          I was expecting proper adjustment in policy like JR points out. Also nothing mentioned of the fund to lending scheme where the govt is making so much money available to banks it does not need savers money. When is this going to be changed.

          Where is there no chorus of returning regulation back to the Bank of England. The FSO has been an utter disaster. Maker CEOs and directors earn their money by making them personally responsible, better than any regulation! Furthermore separate ordinary high Street banks from investment banks, clear distinction before Glass and Staegle was abolished by Clinton and followed by Blaire! This was introduced after th crash of 1930 s and work d perf calypso well until Clinton wanted th black south vote and wanted to use th banks to achieve it, in return Glass and strangle abolished, 14 years of whoppee by bankers and then the crash through subprime mortgages.

          I am sure there are many alternatives but keeping the same before th crash to enrich bankers is stupid. Has Fred Goodwin suffered any real financial detriment for the suffering he caused? Have any of the bankers? Time for real change.

          What disappointe me is that it is clear JR and others are available for office yet we have a Europhile dim-wit still playing games ahead of doing the right thing for the economy and people of this country. As Osborne before they have an open goal and shoot over the cross bar!

  2. Duncan
    Posted November 3, 2017 at 6:09 am | Permalink

    Mr Redwood.

    You know full well that Carney and his pro-EU cronies will try to engineer a slowdown (through a rate’s increase) to create a pretext to justify the UK not leaving the EU or certainly remaining attached to it in some shape or form. It’s Reichstag politics.

    Why don’t you simply stand up in the commons and accuse Carney of doing just that and then call for his resignation?

    When will the Tory Eurosceptic faction rise up, organise and impose themselves upon a grotesque leadership obsessed with staying in the EU and all things liberal left?

    What is the purpose and point of the Conservative Party? You know something? I believe you lot couldn’t care less. Today, it’s all about pay, pensions and entitlements and the nation and its traditions can go to hell

    The Tory Eurosceptics signalled their true intentions when they voted for the left leaning Theresa May as leader.

    I believe we will never leave the EU and democracy itself will be circumvented by a disgusting, arrogant elite

    • Rien Huizer
      Posted November 3, 2017 at 9:29 am | Permalink

      Do not despair, the EU does not want the UK back, it seems as they are not making any effort to help pro-EU forces in the UK. Democracy and referenda are a difficult combination. Democracy is, in its widest sense, government with the consent of the relevant population. Democracy is not anarchy, it is system of government. To what extent referenda should play a role in government “democratic” as they may seem to the layman depends on the constitution. Just having the occasional referendum based on ad hoc legislation and then framing such a large scale opinion poll in a way that lacks information (I am aware that this is the LibDem argument and generally that would not be my favourite political tribe but in this case it is correct) is simply bad government, nothing to do with democracy. Also: democracy is not anarchy, mob rule or fulfilling every whim of whoever succeeds in getting the media behind them. Apologies for the rant.

    • Mitchel
      Posted November 3, 2017 at 10:06 am | Permalink

      The Eurosceptic right need to develop their own version of Momentum and a revolutionary spirit;otherwise it’s just so much hot air.

    • Lifelogic
      Posted November 3, 2017 at 10:46 am | Permalink

      Much truth in all that unfortunately, I suspect.

      “What is the purpose and point of the Conservative Party?”. It currently seems to be to ape Corbyn, damage the economy, tax borrow and piss other’s money down the drain. thus virtually ensuring a Labour/SNP +? to win the next election and give us a UK Venezuela. But they do have about 100 sound, mainly back bench MPs I suppose – without them it would be surely even worse.

      • Lifelogic
        Posted November 3, 2017 at 2:48 pm | Permalink

        This while fussing about a few rather trivial pats on the knee! Yet thousands are dying for no good reason – in the dysfunctional NHS they run.

    • rose
      Posted November 3, 2017 at 11:04 am | Permalink

      I don’t remember the people you mention supporting Mrs May in the Leadership contest. The fact is they were ultimately outnumbered by the remainiacs. At every stage of the contest they supported the candidate who wasn’t Mrs May. As did many of us.

      • Lifelogic
        Posted November 4, 2017 at 4:22 am | Permalink

        Indeed and May is proving to be even worse than I thought she would be. A broken compass, poor, robotic presentation and a huge electoral liability Why did she ever joint the Tories with socialist, interventionist, big state, views like hers?

    • NickC
      Posted November 3, 2017 at 11:16 am | Permalink

      Duncan, I largely agree, though it was probably the 1922 committee that arranged Mrs May’s takeover, not Tory MPs in general. As well, the discredited Cameron had just resigned and the country was leaderless immediately after the Brexit win.

      However you are right May has been dreadful. She has neither the motivation nor the intellect to stand up to the EU, our own civil service, and Continuity Remain. Yet it is not Leave that has created this mess, it is the Remains in their various forms.

    • paul Miller
      Posted November 3, 2017 at 2:50 pm | Permalink

      I agree Totally! The only way is through a ballot box revolution which likes the vote to leave the E.U. they think won’t happen..I beg to differ…

    • Lindsay McDougall
      Posted November 4, 2017 at 2:56 am | Permalink

      Yes, Mr Redwood. I do believe that Parliament is allowed to express a vote of No Confidence in Governor Carney, so why don’t you give it the opportunity.

  3. Duncan
    Posted November 3, 2017 at 6:30 am | Permalink

    What is happening to the Conservative Party? We have a non-entity named Williamson now promoted to Defence Secretary whose only objective appears to be stopping Boris Johnson from becoming leader of the Tory Party

    We have a leader who is without doubt the most incompetent wreck it’s been my displeasure to witness. This leader, her lethargy and spineless demeanour on show for all to see, will bring down my party.

    GET RID OF MAY NOW. Stop Williamson and Hammond. We need a traditional Eurosceptic Tory as leader, someone who can fight with some heart, confront the liberal left and explain to traditional labour voters why Labour and the EU is not the place where they should place their faith.

    • DaveM
      Posted November 3, 2017 at 8:10 am | Permalink

      My thoughts precisely.

    • The Prangwizard
      Posted November 3, 2017 at 9:06 am | Permalink

      And bring down the country too. She is in my view a Common Purpose globalist subversive whose perverted view of what is right and wrong, good and bad will bring nothing but disaster to those of us who believe in such things and the sovereignty of the nation state.

    • Denis Cooper
      Posted November 3, 2017 at 10:47 am | Permalink

      But I’d barely heard of Fallon before he was put in charge of defence … even worse, I don’t think I’d really heard of Cameron at all before he stepped out of the shadows and suddenly became the new favorite to become Tory leader, and he was not “a traditional Eurosceptic Tory” was he? Indeed how many of them are there among the Tory parliamentarians? Look at what happened in the past when MPs were given the opportunity to vote in favour of the sovereignty of their own Parliament …

    • graham1946
      Posted November 3, 2017 at 11:10 am | Permalink

      From what I heard on radio yesterday, she appointed him because ‘she owes him’. Nothing about experience or competence. Says it all about politics really. PM’s rarely appoint anyone they consider might be more talented than they are, therefore we get the endless parade of second raters making messes.

    • NickC
      Posted November 3, 2017 at 11:26 am | Permalink

      In particular there needs to be an investigation into why we scrapped our pocket aircraft carriers before the QE was available, and sold our Harriers to the Americans.

      Indeed the Harriers could have been used on the QE. They are so cheap in comparison to the F35B that we should should build new (about 30 would do the job).

      • DaveM
        Posted November 3, 2017 at 2:15 pm | Permalink

        The F35s will be ready when the carriers are at IOC. Agreed that the UK is obsessed with going to war in nothing less than a Rolls Royce and that BAE overcharge to almost extortionate levels, and as much as I loved the Harriers, a brand new carrier needs 5th generation aircraft.

        • NickC
          Posted November 4, 2017 at 2:08 pm | Permalink

          DaveM, Apart from the fact that our new carriers are too small, too obsolescent, and not nuclear powered, we haven’t actually got the 5th gen aircraft that you say the QE “needs”; and won’t have for years.

          As QE Captain Kyd said: “We’re constrained by the F-35 buy-rate even though that was accelerated in SDSR in 2015, so initial operating capability numbers in 2020 are going to be very modest indeed.”

          So a batch of new Harriers now will provide much needed work for BAe, and give initial fixed wing capability as the QE becomes operational well before enough F35Bs are available and worked up.

      • chris f
        Posted November 3, 2017 at 3:17 pm | Permalink

        I’ll bet the Americans couldn’t believe their luck when we sold them the recently upgraded Harriers for an absolute song. That was a national disgrace.

        MOD procurement should be a case study for all Business-related courses in all Universities as an object lesson in how not to do things. Along with the NHS, of course

      • Andy
        Posted November 3, 2017 at 3:44 pm | Permalink

        Harriers were a brilliant aircraft.

        • Lifelogic
          Posted November 4, 2017 at 4:55 am | Permalink

          For some things yes, but rather limited in many ways and slow/subsonic.

          • NickC
            Posted November 4, 2017 at 10:17 am | Permalink

            Rather faster than helicopters, and more reliable, and less vulnerable, and better armed. Yet helicopters are all we’ve got at the moment.

      • Iain Gill
        Posted November 3, 2017 at 5:10 pm | Permalink


        A lot to do with the RAF being asked which aircraft to cut, they picked navy planes in the worst spirit of stupid inter service rivilary. And a bunch of clueless public school duffers led by Cameron who were clueless.

        So some useless RAF planes and people were kept on.

        All the more reason for radical change at the mod including crashing the three service leadership’s into one or two.

      • getahead
        Posted November 3, 2017 at 8:44 pm | Permalink

        Nick, since when was common sense ever part of politics? My heart sank when they got of the Harrier workhorses. Almost as much as my heart sank when we were presented with May as prime minister and to cap it all Hammond as chancellor. God help Britain because the Tories won’t.

        And Duncan, last paragraph, absolutely correct.

    • Iain Gill
      Posted November 3, 2017 at 5:17 pm | Permalink

      Yes may must go.

    • Glenn Vaughan
      Posted November 3, 2017 at 5:40 pm | Permalink

      Duncan – Have you signed the petition in support of Jacob Rees-Mogg?

      No point bellyaching daily on this website instead of taking positive action.

  4. Dame Rita Webb
    Posted November 3, 2017 at 6:32 am | Permalink

    Regardless of whether its 0.5% or a 0.25% you should be asking why we have had ZIRP for nearly ten years now if the economy is in such good shape? It should be obvious to anyone here of the damage that it is causing to savers and to those administering a pension scheme. Those that are receiving their pension now should also note that they are not immune from the strain that ZIRP puts on a scheme’s liabilities and that the income they are receiving now is not fully guaranteed for life either.

    • Peter Wood
      Posted November 3, 2017 at 8:10 am | Permalink

      Dame R W,
      I believe the answer to your question is that the Gov/BOE has no choice; as in the US. Imagine what would happen to the ‘price’ all the assets we have borrowed against if interest rates went back to ‘normal’, say 2% above inflation. We have debased the value of money, and all the inflation has gone into, mostly, house prices and the stock market.
      I believe we will have to raise rates, sooner or later, and the effect will be.. disturbing…

    • Know-Dice
      Posted November 3, 2017 at 8:47 am | Permalink

      Don’t forget, savers moving in to “buy to rent” and the effect that has had on house prices and those trying to get on the “housing ladder”…

    • Hope
      Posted November 3, 2017 at 12:34 pm | Permalink

      Explain ZIRP please so it is clear what you mean.

      Duncan is right, albeit about six years later than the rest of us. Rudd admonishing the police for asking for more money, the next day her department saying they lost 56,000 including hundreds of criminals! How do you lose 56,000 people, where do they work, gang masters she is responsible to stop, where do they get health- A&E that Hunt should have stopped, where do they live, sub let social housing? Her incompetence is only second to May. This is before we discuss how two of the three attrocities thus year were through insecure borders! What does she have to do to get sacked? Same for Carney, same for Hammond. If this was a Johnson there would be a witch hunt.

  5. Dave Andrews
    Posted November 3, 2017 at 7:05 am | Permalink

    In or out of the EU makes no difference to:

    our national debt which costs 4 times our EU contributions just on interest,
    an obesity epidemic with all the health services burden that entails,
    an ageing population and lack of adult services to cope,
    global competition from low wage regions undercutting our businesses,
    immigration putting strain on local services.

    The effects of Brexit are much over-rated.

    • Dame Rita Webb
      Posted November 3, 2017 at 8:04 am | Permalink

      You forgot to add our constant meddling in other parts of the world too. Decisions to do so that are taken in London not Brussels. Having said that I do not know what somebody who is in his early 40s, only been an MP for seven years and has a sociology degree from Bradford is going to do to shore up the defences of the UK.

    • Anonymous
      Posted November 3, 2017 at 8:44 am | Permalink

      Dave Andrews – And paralysis in decision making because we are a nation without identity or consensus and riven by political correctness.

      It is the absence of polarity in politics causing all the problems. Voting makes no difference.

    • Ed Mahony
      Posted November 3, 2017 at 11:24 am | Permalink

      I agree.

      Hardline Remainers and Brexiters are like rabbits caught in headlights. It’s become an obsession. Like someone addicted to sex or heroin.

      There are many other really important, non-Brexit things we need to address NOW. Otherwise, problems are just going to accumulate to a point where the country will be over-whelmed by a toxic mix of Brexit, and more importantly, by non-Brexit issues together.

      (And not forgetting, most of the population are neither strongly remain nor leave, and they’re the ones who will have the final say by voting in or out certain governments, demanding referendums, and so on)

      Sorry if people find this boring or annoying but it’s the truth, and truth never hurt anyone in the long-run.

      • Ed Mahony
        Posted November 3, 2017 at 12:02 pm | Permalink

        ‘Sorry if people find this boring or annoying but it’s the truth’

        – at least i think it is .. happy and open to be corrected ..

        (BTW, I’m addicted to lots of things, unfortunately, but i want people to challenge me, not tell me my addiction or obsession is a healthy thing).

    • getahead
      Posted November 3, 2017 at 8:49 pm | Permalink

      “The effects of Brexit are much over-rated.”

  6. Excalibur
    Posted November 3, 2017 at 7:06 am | Permalink

    Another perceptive commentary, JR. Mark Carney appears to be an egotist determined to see his inaccurate forecasts fulfilled. Why is he still Governor of the BOE ?

    Yesterday, on SKY’s All-Out Politics, we had Michael Heseltine’s double, one A.C. Grayling, spouting unchallenged, anti-Brexit vitriol. Wikipedia cites his main academic interests as epistemology, metaphysics and philosophical logic. Why do these academics regard themselves as experts in unrelated fields. More egotism, I suspect.

    • stred
      Posted November 3, 2017 at 9:01 am | Permalink

      The interview could have been titled ‘Smug meets Condecending’. I wonder whether he take the Monnet from the EU machine.

    • Lifelogic
      Posted November 3, 2017 at 11:00 am | Permalink

      True but so many (economic especially) academic experts talk complete drivel, even in their own area of “expertise”. The BBC seems to select only the ones that do this in general – be it on economics or on climate alarmist or almost anything else. In these subjects you can get away with drivel – for engineers the design has to actually work – or it is quickly apparent to all.

      Most (even the Cambridge ones) were in favour of the Euro and the ERM. People like Samuel Brittan – Leon’s brother for example and most BBC think “experts”.

    • Dennis Zoff
      Posted November 3, 2017 at 11:02 am | Permalink

      “Why do these academics regard themselves as experts in unrelated fields.” Good point?

      For example, Board of Directors (of well-managed successful companies) will draw their talent from a pool of well-qualified individuals that are generally schooled in their chosen profession.

      The Government is the antithesis of this sound practice….and then the general public wonder why the Government has such an appaling record on just about anything you care to mention?

      If nothing else, Brexit has, without doubt, opened people’s eye to the disgraceful mediocracy of our ruling classes and their total ineptitude to run a country, let alone a corner shop!

  7. Caterpillar
    Posted November 3, 2017 at 7:14 am | Permalink

    Slightly off topic – it was interesting to Read that HE are considering applying for a full banking license in the UK as as to be able to continue to offer loans/finance after Brexit. Obviously planning to continue to sell in the UK.

    • Caterpillar
      Posted November 3, 2017 at 1:47 pm | Permalink

      Typo – VW not HE

  8. Lifelogic
    Posted November 3, 2017 at 7:16 am | Permalink

    Indeed you have this exactly right. The absurd tax regime particularly on let properties, the attacks or diesel cars and the red tape (which is constricting bank lending) are the main problem.

    The BoE is absurdly anti-Brexit and in this it is totally wrong and consistently proved wrong. Hammond should deal with them but one suspects he is just the same. Anyone who thinks stamp duty (a turnover tax) at up to 15% on houses and taxing landlords (and thus tenants) on profits they have not even made is clearly a fool. Many taxes are already far too high even for maximum tax take. IHT at 40% over £325K is also hugely damaging to the economy and inward investment.

    Carney & Hammond also needs to take action to get some real competition in banking. 0.25% or less on deposits yet charging from 4%+ to very well secured borrowers (many far more sound and solid than the banks themselves) is proof of a dysfunctional market. The banks are able to abuse their position hugely and are doing so.

    • Lifelogic
      Posted November 3, 2017 at 7:33 am | Permalink

      Let us hope Hammond, in the budget in under three weeks time, shows some economic sense and finally becomes pro growing the tax base with lower simpler taxes and shows some real pro business vision. We need a far smaller government, far less red tape, relaxed planning, relaxed green crap building regs, abolition of green crap grants and subsidies, more private competition in education and health, far more freedom for people to choose how they spend their own money …… Above all – kill all the endless waste and daft “investments” like HS2 and Hinkley C and cut the bloated and largely inept, 50% over paid and mainly parasitic state sector down to a size we can afford to carry.

      • Bob
        Posted November 3, 2017 at 8:56 am | Permalink

        Couldn’t agree more.

      • stred
        Posted November 3, 2017 at 9:27 am | Permalink

        Where I stay in London, most of the neighbours are black cab drivers. They will be unable to use their diesel cabs from 2019 and will have to buy or rent a new hybrid black cab, which is being built in Coventry with a £100m grant from the taxpayer. The cost of these is £56,700 or at a rental which, they are told, will be the same as they pay now for fuel, which is 80% tax. They are also told that this will make the new cab no more expensive. But they will have to buy petrol for most of their travel, and wait half an hour to re-charge, if they can find a charging point. They are competing with UBER and uberlike Prius cabs, which can be bought for £5-10K. Not one cabbie that I know is interested. It’s all in the plan from on high with agenda this and that.What could possibly go wrong.

      • Leslie Singleton
        Posted November 3, 2017 at 10:09 am | Permalink

        Dear Lifelogic–You are slipping and have not mentioned that Williamson read Social Sciences

        • Lifelogic
          Posted November 4, 2017 at 4:32 am | Permalink

          Oh dear at Bradford University too. He does not sound like the numerate and rational type who will be able to sort out the piss money down the drain, basket case that defence procurement in the uk.

      • Dennis Zoff
        Posted November 3, 2017 at 11:14 am | Permalink


        Sadly, I believe you, like me, will be sorely disappointed with anything coming out of Hammond!

        The British establishment is wholly underperforming and will, unfortunately, continue to do so in the immediate future!

      • William Long
        Posted November 3, 2017 at 12:02 pm | Permalink

        It’s not even worth the trouble of hoping for any of the desireable things you list from Mr Hammond. He sees life from a completely different perspective.

        • Lifelogic
          Posted November 3, 2017 at 2:52 pm | Permalink

          True his is a puppet/actor controlled by the treasury – government for and by the state sector off the backs of the productive.

      • fedupsoutherner
        Posted November 3, 2017 at 5:31 pm | Permalink

        L/L All these things you have listed will not happen.

    • Lifelogic
      Posted November 3, 2017 at 9:15 am | Permalink

      The pound has fallen and not risen since the BoE decision to raise rates. Doubtless it will fall further if we get the expected misguided budget from Hammond.

      • Lifelogic
        Posted November 3, 2017 at 11:02 am | Permalink

        So their is little confidence in Hammond or Carney’s agenda!

        • hans chr iversen
          Posted November 4, 2017 at 3:52 pm | Permalink

          like there is little confidence in the agenda of teh present and past brexiteers

          • NickC
            Posted November 4, 2017 at 11:21 pm | Permalink

            Hans, Only Remains have a problem envisioning us as an independent country. It shouldn’t be that hard – most of the rest of the world is free of the EU.

    • Chris
      Posted November 3, 2017 at 9:53 am | Permalink

      The very fact that May does nothing about it speaks volumes. Why do the Brexiteer Cons MPs not act decisively. We are proceeding step by step away from leaving the EU and all our MPs can do is watch and talk from the sidelines. I echo Duncan’s sentiments above. I am thoroughly disgusted by what has happened, and by what is happening. Brexit is being taken away from us and in the meantime Europhile MPs and others celebrate in a lavish dinner (£2000 per head at a luxury Knightsbridge hotel, according to Guido). Perhaps you can guess which Tory is guest speaker? Anna Soubry.

      • Timaction
        Posted November 4, 2017 at 10:46 am | Permalink

        When is the Whip being taken from her and most of the underperforming Parliament? Oh for a real leader.

  9. alan jutson
    Posted November 3, 2017 at 7:17 am | Permalink

    The two largest purchases most people make are houses and cars.

    Government has slapped huge stamp duty increases on house.
    Has totally confused the public with diesel gate scares, London and other cities are now charging against such vehicles emissions.

    No wonder both of these industries are now showing signs of stress.

    The only option against buying or moving house is to either rent or stay put !

    With no electric infrastructure and poor battery range and life, the only option with a car for most people is to return to petrol, or retain the existing vehicle until is uneconomical to run.

    Big Government is the problem, not the solution, in far too many areas.

    Too many polices do not account for human nature or behaviour.

    • Lifelogic
      Posted November 3, 2017 at 8:51 am | Permalink

      No the largest purchase they make is government which tax about 50% of their lifetime earning of them. They get back very little in real value for this. Particularly if they use private medicine and schools are more people should be encouraged to do.

      Second hand cars are actually very cheap indeed now. Often more reliable and safer than complex & lighter new ones and, when the building of the new car, is taken into account, can be the greenest option too.

    • Bob
      Posted November 3, 2017 at 8:58 am | Permalink


      “Big Government is the problem, not the solution, in far too many areas.”

      Couldn’t agree more.

    • ChrisS
      Posted November 3, 2017 at 9:36 am | Permalink

      Alan, you are absolutely right !

      I recently wanted to change my large eight year old diesel car which has been totally reliable so far. However, when visiting the garages and looking at what might be the last new or nearly new car I buy, (I tend to keep my cars a long time ) I was genuinely purplexed. The larger petrol models are not economic enough and would I still be able to drive everywhere I will want to go in 5-8 years time if I buy another Diesel ?

      I went to a Tesla sales event and, despite all the hype, the range just isn’t enough for a decent continental trip and the fit and finish is light years behind a Jaguar and an Audi yet the cheapest Tesla costs £75,000 !

      So I will keep my current car. Hammond has lost more than £10,000 in VAT and a lot of road tax over the first five years.

      Furthermore, owing to the ridiculous rates of stamp duty, we won’t be moving house either!

      More stamp duty and VAT the chancellor won’t be receiving and less growth in the economy because we won’t be spending a load of money on alterations and improvements to the house we would have bought.

      We would also like to sell one or two of our Buy-To-Let properties as well but we won’t because of the equally penal rates of CGT. More money that won’t be recirculating in the economy and less tax paid.

      These government policies mean a loss of at least £35,000 to the Treasury this year alone and that’s just taxes that my wife and I will not be paying ! Never mind the knock-on effect on the wider economy of our decisions.

      Unlike our host, Nigel Lawson and many others, why can’t the cabinet and Mrs May see the idiocy of the policies that have been pursued by the last two so-called Conservative Chancellors ?

    • Mitchel
      Posted November 3, 2017 at 3:43 pm | Permalink

      “Too many policies do not account for human nature or behaviour”

      But Western governments(or,rather,the people that really run things)have decided that human nature can-and will-be changed.You can see it plainly from the social engineering policies of the past few decades,indoctrination passing for education and increasing codification of almost every aspect of our lives into law (plus the sinister obsession with “mental health issues”).

      All stemming from Lenin’s discussions with Dr Ivan Pavlov(of dog fame) and his attempt to create the Homo Sovieticus-“the formation of the New Man is the most important component of the entire task of Communist construction”.

      Only such New Men (Common Purpose graduates?)are allowed to be in the upper echelons of the Big Government that is necessary to keep this show on the road.

      • a-tracy
        Posted November 4, 2017 at 10:01 am | Permalink

        Well then that was a mistake as they didn’t take into account women with their own minds. Not all of my brethren are supporters of this current witch hunt in fact many of us read The Crucible and are wondering how to stop this before it gets out of hand.

  10. Simon Brown
    Posted November 3, 2017 at 7:17 am | Permalink

    Why is Carney still in the job?

    • Anonymous
      Posted November 3, 2017 at 8:47 am | Permalink

      Before the usual suspects accuse Dr Redwood of the blame game it should be pointed out that it is, in fact, Mr Carney playing that one.

      Twice on interest rate movements he has blamed Brexit.

      • Timaction
        Posted November 4, 2017 at 10:48 am | Permalink

        Yes indeed. Up and down. He relies on the masses not to follow his totally contrary messages and a compliant fake news msm.

    • Lifelogic
      Posted November 3, 2017 at 8:52 am | Permalink

      Surely because May and Hammond are just the same as Osborne – wet, tax borrow and waste, soft socialist remainers at heart.

    • Bob
      Posted November 3, 2017 at 9:17 am | Permalink


      “Why is Carney still in the job?”

      Beats me. Maybe it’s because the Cabinet is largely comprised of fellow Remoaners? It surely can’t be due to the effectiveness of his “forward guidance”?

      The BBC had a member of the MPC on R4 this morning (sometime around 07:30 – 07:45 if u want to find on iPlayer) making false claims about Mr Carney’s pre referendum predictions. I am pleased and surprised that the female presenter didn’t let him get away with it.

    • Chris
      Posted November 3, 2017 at 9:54 am | Permalink

      …because he suits Theresa May’s purpose, apparently.

    • Rien Huizer
      Posted November 3, 2017 at 9:55 am | Permalink


      Carney must have a strong sense of duty. He was selected for this job based on his record in Canada and his views on monetary policymaking. One should keep in mind that the UK is a relatively small, open economy with a disproportionally large financial sector, much of it (not in terms of staff numbers of customers or offices, but in terms of capital, risk weighted size and catastrophe potential (hence the emphasis on systemic risk) owned by foreigners and a large part (RBS) still owned by HMS Treasury. There are only three financial centres comparable to London (ie without a very large capital market in the home currency) : Singapore, Hongkong and (far far behind) Dubai. London is unique because it is burdened by a large domestic economy. Other centers like New York, Tokyo and Shanghai are incomparable because they have very large home-markets. Before Brexit, London counld count on the presence of a quasi-home market in the EU, which became increasingly homogeneous since the Maastricht treaty and would have been complete should the UK have adopted the EUR.

      The situation now is that the UK is far too big to be a Singapore or HK (in both countries domestic monetary policy making is completely different from the UK’s ) and far too small to even be a Tokyo or Shanghai.

      No one can deny that a situation of aggregate uncertainty as created by the way the government handles Brexit is a cause for concern wrt systemic risk and hence triggers macroprudential procedures. Gvt policy it should have been either “out” quickly, pay your bills, do not fret and move on, or disregard the referendum and let Parliament decide what to do next, whilst maintaning the status quo. This is neither here nor there and it is getting worse. I completely agree with Mr Redwood that exit should happen as quickly as possible but is is incorrect to blame the BoE for doing its job, which is to prioritize monetary and financial stability over general macroeconomic policy. Under central bank independence that is the task of the government, of which the Bank is not an arm.

      • Simon Brown
        Posted November 6, 2017 at 7:33 am | Permalink


    • Leslie Singleton
      Posted November 3, 2017 at 10:16 am | Permalink

      Dear Simon–Why did a foreigner ever get the job in the first place? Was the problem the EU as always? Is it against their “values” to insist on a National born and bred as should obviously be the case for a position such as this. Apart from all else we needed maximum possible experience of the British economy and he ain’t that.

      • Lifelogic
        Posted November 4, 2017 at 4:38 am | Permalink

        There were many UK people who would have done a far better job for 10% of the salary. But Osborne had other ideas.

  11. Sakara Gold
    Posted November 3, 2017 at 7:19 am | Permalink

    The BoE obviously knows something that the rest of us don’t. Are the rating agencies about to downgrade us again? Will servicing the gigantic national debt start to cost more if the foreigners demand greater yield to compensate them for perceived greater risk? This may be the thin end of the wedge. The construction industry has started to make redundancies. Methinks an ill wind bloweth our way in 2018

    • Anonymous
      Posted November 3, 2017 at 8:51 am | Permalink

      But let’s not blame Brexit.

      Emergency interest rates were declared long before a referendum was thought of.

    • mickc
      Posted November 3, 2017 at 9:08 am | Permalink

      As the BoE doesn’t know its a*** from its elbow, it is highly unlikely to know if the rating agencies are to downgrade the UK. In any event, such agencies surely have no credibility after their failure to perform prior to the Crunch.
      I agree an ill wind bloweth….but it is entirely due to actions relying on the advice of such “experts”.

  12. Mark B
    Posted November 3, 2017 at 7:34 am | Permalink

    Good morning

    I think the rate rise, which I said I believe would come about now to normalize the economy, has more to do with inflation than anything else.

    The pound vs dollar has continued to slide for many many years and, as commodity prices are mostly traded in dollars this will in turn will lead to higher prices. Strangely only in 2017 has this tend been redressed .

    The BoE and the MPC are only interested in curbing inflation. But with the Budget just around the corner me think that the government may be seeking some tax cuts.

    • stred
      Posted November 3, 2017 at 9:14 am | Permalink

      Housing costs are now included in inflation figures. A rate increase puts up mortgages for owner occupied and rental properties. The Bank thinks putting up rates will reduce inflation. Please explain.

    • Bob
      Posted November 3, 2017 at 9:21 am | Permalink

      “with the Budget just around the corner me think the government may be seeking some tax cuts.”

      Nah, you’re confusing budgets with elections 😂

  13. Roy Grainger
    Posted November 3, 2017 at 7:42 am | Permalink

    Government policy is to make buying some sort of cars unattractive (due to environmental impact) , then they complain when car sales go down. Government policy is to make fuel expensive (due to environmental impact), then they complain when energy prices go up. Government seems to have a very shaky grasp of cause and effect.

    • Lifelogic
      Posted November 3, 2017 at 8:56 am | Permalink

      Indeed and they want productivity to increase – but endless red tape, daft employment laws, planning laws, taxation, expensive energy and bloated government is the biggest obstacle to this. What does May & Hammond think that enforced gender pay reporting and the work place pensions do for productivity. What does all the micro-managing of the banks do for productivity?

    • Man of Kent
      Posted November 3, 2017 at 9:44 am | Permalink

      But they just blame energy prices on the supply companies and car prices on the manufacturers and their emission dodging software .
      Then you [ the govt ] can say :

      ‘It ain’t me guv ‘
      ‘Put a cap on it ‘

      RG and our host are right – cause and effect are now interchangeable concepts .

      Please get rid of May before she causes more damage .

      All I want is a pragmatic Conservative leader to detoxify the Party by de-selecting most of the Remain Camp who seem to have a monopoly on viewing the world
      from the wrong end of the telescope .

      We are being treated as idiots with the ‘Transition/ implementation Period ‘ merely adding to the National Debt and Interest payable.

    • chris f
      Posted November 3, 2017 at 3:23 pm | Permalink

      One could mention ‘the law of unintended consequences’, but surely…surely…you would think that these people have thought it through before they make decisions that impact everyone else


  14. Mel Cornwell
    Posted November 3, 2017 at 7:54 am | Permalink

    **The Bank seems to have lost its impartial interest in the figures and gained an unhealthy wish to blame Brexit for anything adverse.**

    Yes, absolutely that, in a nutshell. The pathetic part of it is that Carney and Hammond are behaving as though they are acting under cover of darkness, when in fact British apathy has gone now, and we can ALL see what their game is.

    Both of them (and several of their cronies) should have been removed from office long since – they are failing to accept the will of the people, and are actively disrupting our chances of a successful and smooth Brexit. They are thinking that if they can confect discomfort, and make life ‘unpleasant’ enough, and pin the blame on Brexit, then all us Leavers will “change our minds”. This tells us they have COMPLETELY FAILED to understand the mood of the majority of folk in the UK.

    And yet… Fallon goes down the road, and he is immediately replaced with a bizarre left field Remainer appointment!! THAT is not the fault of Carney or Hammond…

    Some people in government, on whom we have placed enormous trust to enact a full and proper Brexit, appear to be ignoring our wishes. And we ARE watching…

    Taking us for fools is a massive error of judgement, with the very real danger it will end in blood, snot, and tears further down the line.

  15. Ian Wragg
    Posted November 3, 2017 at 7:57 am | Permalink

    So Macron and Murky are demanding an up front payment of £44billion before starting to discuss trade.
    No doubt May has given quiet confirmation to Drunket that this will be paid one way or another.
    May appoints another wet remainiac for Defence Secretary so entrenching her true feelings. When are you going to get rid of the silly women playing fast and loose with the referendum outcome.

  16. oldtimer
    Posted November 3, 2017 at 7:57 am | Permalink

    In my opinion BofE statements should be judged in the context of the wider campaign by Remainers to frustrate, disrupt and discredit the Brexit process. So far they appear to be succeeding. The BofE, Treasury with the help of prominent political figures (witness the recent Clarke, Clegg, Adonis trip to see Barnier and the EU Commission to “discuss cricket” as Ken Clarke wittily described the visit) and the campaign to screw up the legislative programme provides plenty of evidence of this.

  17. Rob Jump
    Posted November 3, 2017 at 8:05 am | Permalink

    The Bank of England does not work for the benefit of the country. It works for the banks. Specifically it works for the owners of the banks. To believe otherwise is delusion.

  18. Nig l
    Posted November 3, 2017 at 8:30 am | Permalink

    The FT reports that this signals a gradual rise in interest rates whereas I think Carney said no more were planned. The FT have recently announced that it is their duty to oppose Brexit. Enough said.

    David Davis stated that any deal will favour the EU. Who ever accepts a negotiator prepared to accept defeat? Seems to be signaling that we will crumble rather than go fo NoDeal.

  19. Bert Young
    Posted November 3, 2017 at 8:59 am | Permalink

    The coming of Carney began the BoE’s detachment from the public . The moves it has made and its publicised views have done nothing to stabilise or to move the economy on in a very competitive world . Records speak for themselves and the accusing finger has to point to Carney . He definitely has to go .

    Of course sales of cars and the housing market are items of interest and there is no doubt that the cost of money has had an effect on purchases . However rising above these features is that of the substantial increase in population ; we have not the room in this country to deal with this huge problem and it has to be brought under control ; only then when it has stabilised can we truly examine the economy in the light of personal productivity .

  20. Kenneth
    Posted November 3, 2017 at 9:01 am | Permalink

    Mr Redwood I could never vote for your socialist party.

    I would ask that you consider how you can remove those that have turned it into New Labour or form a new party

  21. agricola
    Posted November 3, 2017 at 9:18 am | Permalink

    Problem is the BoE is full of highly intelligent experts who pray at the economist altar. They are also suspect on Brexit. It won’t be long before HMG tell them to back off for the simple reason that HMG cannot afford the interest on it’s vast loans.

  22. Peter Miller
    Posted November 3, 2017 at 9:26 am | Permalink

    It just makes so much sense to have a pessimistic, foreign, remainer as our chancellor in these times of Brexit!

  23. A.Sedgwick
    Posted November 3, 2017 at 9:33 am | Permalink

    The appointment of Mr. Carney was mystifying, although how the man who appointed him became Chancellor is more so. Would the USA have a foreign chairman – J.Powell just announced for Fed. As your piece on GB suggests the downgrading of the Bank was instrumental in the reckless credit expansion of the banks. Mr.King was an old school Governor and the clue is in the title. Governors used to be the “Godfathers” of the City, don’t step out of line and if there was a crisis they would discreetly get the club to sort it out.

    The old Halifax Building Society had a similar role through its size, if a society got into a mess, they were big enough to sort it out – how reputations change – from hero to zero in a few decades.

  24. BOF
    Posted November 3, 2017 at 9:50 am | Permalink

    Carney’s sole aim is to engineer mistrust in Brexit.

    Off topic John, many of our MP’s seem to have become more delicate than student snowflakes sheltering in their ‘safe spaces. Are we now entering a time when careers will be ruined, jobs lost and reputations wrecked, all on they say so of someone with a grudge as against evidence of misconduct?

  25. Iain Gill
    Posted November 3, 2017 at 10:01 am | Permalink

    Biggest underlying problem is the proportion of what we earn that the state spends, and the ongoing ever increasing national debt.

    Roll back the state, reduce the size of the state sector, hand much more buying power over to individuals.

    Stop the state manipultation of so many markets, and the massive complexity this adds to the tax system and admin burden on everyone.

    Keep people who have never had a proper job in the private sector out of important public sector roles, including in the bank of england.

    Sack the governor, impose new fairer rules on political candidate selection (opening up the system to more normal people…

    Stop funding PPE courses

    Not rocket science

  26. Rien Huizer
    Posted November 3, 2017 at 10:10 am | Permalink

    Mr Redwood,

    Your judgment of the MPC decision is not fair. The bank is independent and it is acting within its mandate. Carney himself is a known market monetarist and he has done a good job . The most important macroeconomic outcome of succesful cantral bank policy is steady growth of nominal GDP along a feasible path. For the UK that until Brexit was operating under soft labour market constraints (a large supply of skilled workers from the EU), feasible NDGP growth has been around the 5% level and even now that seems to be attainable (1-2% RGDP + 3% inflation). The policy mix supporting that has not changed, there is no sign of reducing the Bank’s balance sheet and future policy (symbolized by an interest rate perspective) should be sufficient to achieve that target in the future.

    Of course there is the uncertainty about what the impact of Brexit will be (no one knows because it is contingent upon the when what and how of the actual separation and possible replication of UK-EU structures by new means) and hence the Bank needs to be in a state of heigtened alert. Things may go very wrong, despite the fact that you do not believe that.

    The one luxury central bankers cannot afford is optimism. I am curious as to how long Mr Carney will stay. A cynic would have left 6 months ago. Give the man some credit for courage and professionalism, virtues sorely lacking in the upper echelons of government.

  27. Tim Chick
    Posted November 3, 2017 at 10:14 am | Permalink

    May be the fact is all these BoE officials, most MP’s and may others in Whitehall are just nowhere near as clever as they think they are given the complete messes they seem to make of things.

  28. Epikouros
    Posted November 3, 2017 at 10:36 am | Permalink

    The indications at the moment points to another recession so as you say now is not the time to tighten the money supply and put up interest rates. You also point out that Brexit has had no bearing on the economy which would be surprising if it had as nothing has changed and will not until we leave the EU. Forecasts by the BoE, the Treasury and others we know are wrong however they are now going to compound that by making the wrong decisions. As is usual and something we come to expect from government and their agencies. The more politically left leaning the more incompetent they become and now even the Conservative party is leaning heavily in that direction. Government agencies certainly have become totally enmeshed in the progressive socialist dogmas.

    With wrong forecasts, decisions and centrally controlled economy by the so called pundits, experts and intelligentsia who are steeped in the belief in their own omniscience we are going to have yet another economic/financial crisis. That may be of mega proportion this time as the means to untangle the mess that they will create have been exhausted by their past mismanagement of the economic/business cycle especially the last one.

  29. Dennis Zoff
    Posted November 3, 2017 at 10:40 am | Permalink

    “I suggest people look at the evidence instead of trotting out alleged Brexit effects for bad news, and saying despite Brexit for good news.”

    Firstly, anybody with the ability to research this data is fully aware of the negative forces working furiously in the background to undermine the will of the people. In other words, constantly trying to suggest the people made the wrong decision in voting for an exit from the EU!

    Secondly, we are fully aware of the need to filter data, in particular, data coming from any office which is manifestly anti-Brexit!

    Thirdly, I cannot believe anybody listens to these delusively driven narratives from Remainers any longer?

  30. Denis Cooper
    Posted November 3, 2017 at 11:03 am | Permalink

    Off-topic, it’s interesting that Spain is issuing an EU Arrest Warrant for the former President of Catalonia, I wonder which category of offence is being cited.

    “Spain issues EU arrest warrant against Puigdemont”

  31. TIM H
    Posted November 3, 2017 at 11:19 am | Permalink

    The previous tax breaks for B2L landlords were an abomination and George was right to get rid of them.
    If I borrow to buy shares, I am unable to offset my interest costs against dividends, so why on earth should I get tax relief on a speculative B2L portfolio?
    Who cares if (at the margin) leveraging higher rate tax payers find B2L less attractive now. This might exert some downwards pressure on prices and encourage slightly more owner occupation.

    • stred
      Posted November 4, 2017 at 6:06 am | Permalink

      BTL is a business in effect, though not recognised as such by HMRC. It requires borrowing long term and management. Without tax allowances it will fail. The government decided to encourage BTL as social housing was mis-allocating resources. Now the Treasury has spotted a CGT target. Borrowing to buy shares or savings investments was never an option, otherwise it would make the system uncontrollable.

  32. jonP
    Posted November 3, 2017 at 11:25 am | Permalink

    I think all of this BoE small rate rise stuff is over played also Brexit is being given an importance way above what it is- we are leaving the EU- that is what we voted for- and we are going to get new trade deals with countries overseas- that is what we were promised. We did not vote to leave only to seek to join again in some other way. Out is Out.

    Incidentally I don’t know why JR goes on so much about the BoE- if he want’s the job as governor I’m sure he has the right connections to apply when the vacancy happens, according to himself he appears to have all of the qualifications.

  33. Prigger
    Posted November 3, 2017 at 11:32 am | Permalink

    Parliamentarians are going to vote whether the voting age should be lowered to 16. Those voting for it should have their names noted and if they have any children they should be made wards of court unless it can be proved the other parent is an adult.
    Naturally, SNP MPs and those of Plaid Cymru may very well need some Counselling afterwards

    • Lifelogic
      Posted November 3, 2017 at 2:56 pm | Permalink

      We will get voting at 16 if Corbyn gets in. That way even more people will vote for magic money tree economics.

      Would you like more of someone else’s money spent on you – then vote for us.

      • Prigger
        Posted November 4, 2017 at 12:10 am | Permalink

        Youth can be fickle. They can go from left to right in an instant. They did in Germany prior to the last war. Huge went from Young Communists to Hitler Youth. Dreams are not the prerogative of Corbynistas. A responsible leader knows that and does not create a foundation of shifting sands….

      • acorn
        Posted November 4, 2017 at 8:28 am | Permalink

        And, you should be stopped from voting at your state pension age, circa 68; when you become dependent on other people’s NI contributions spent on you. There is no pot of money waiting to pay your state pension, remember?

        Should gaurantee wiping out the Conservative Party vote for ever! 😂

        • Prigger
          Posted November 4, 2017 at 9:33 pm | Permalink

          And Zeno and his Paradoxes. Well, I’ll get round to reading them.

  34. Student
    Posted November 3, 2017 at 11:43 am | Permalink

    Whilst we bicker about hands on people’s laps, racial equality, building council houses to help those on benefits, banning startups from major cities and stopping a small increase on high interest rate student loans, the US is slashing corporate taxes and removing red tape for business. Broadcom is shifting its operations and legal base away from Singapore to America, and I am sure that this will not be the last company to do so from around the World.

    The conservatives have 5 years until the next general election. Every policy and every move counts, and if it is a 5 year campaign of smearing Corbyn and to trying to appease the young and lower-income groups by offering x when Corbyn can claim to offer x^3, the conservatives will lose, and Brexit will be a disaster.

    Start introducing serious competitiveness into our politics. The cabinet needs to talk about what we are going to do over the next 5 years to compete with the likes of Singapore and the US to attract big business after we leave the EU. They need to talk about what we are going to do to attract top talent not just from Europe, but from around the World. They need to talk about what we are going to do raise investment in new technologies and companies to rival Silicon Valley in the likes of Cambridge. They need to talk about what they are going to do to keep the best and brightest here in the UK rather than have them move abroad.

    They do not need to talk about a hand on a leg 5 years ago.

  35. Prigger
    Posted November 3, 2017 at 11:49 am | Permalink

    The BBC has spent perhaps one hour in total this morning on the news Donald Trump’s Twitter account was deactivated for a whole eleven minutes yesterday. Then their boss said they could go out to play for ONLY fifteen minutes and they mustn’t spit out chewing gum on to the studio floor or stick it behind their ears and in other niches. They are Fake News and cleverly pointed out all day recently that FAKE NEWS is two words and not one. We still pay the licence fee.

  36. Iain Gill
    Posted November 3, 2017 at 11:54 am | Permalink

    There is no shortage of good finance managers in this country, Carney should never have been given a work visa. Sort out immigration would sort out Carney too.

  37. Alex Reeve
    Posted November 3, 2017 at 12:13 pm | Permalink

    An interesting piece that tallies with a quote from Mr Norman Lamont’s that the only accurate forecast given by the Treasury during his time as Chancellor was that he would become the most unpopular man in the country. I can only imagine (in my fantasy role as Chancellor) that I would at all times act against the recommendations of the senior officials and, at the same time, cherish the idea of being the only popular Chancellor ever to have held office. One can dream…

  38. Tad Davison
    Posted November 3, 2017 at 12:16 pm | Permalink

    Maybe people need to get wise as to the chicanery that goes on in order to push a certain political agenda, in this case, the pro-remain cause. They will stop at nothing to make Brexit look like a bad idea. It has become routune in some cases and there is the constant need to counter it and call it out.

    There is a danger that we who wish to leave the EU just as soon and as cleanly as possible, might now trust those remainers who appear to have come over to our way of thinking. We do so at our peril. They would revert to type at the Drop of a hat. Weathercocks each and every one, not signposts.

    Tad Davison


  39. nigel seymour
    Posted November 3, 2017 at 12:27 pm | Permalink

    I’m with JRM all the way. Carney is past his sell by date and lost the plot pre-brexit when he completely broke with long held protocol that the BOE should remain totally schtum at elections/refs. Clearly he was encouraged by Downing St to speak out along with Obama in a clear attempt to sway voters to remain. Carney has had little right in his forecasts and speeches and should bring forward his decision to leave. Perhaps Verhofstadt or Junker would like the job?

  40. hans chr iversen
    Posted November 3, 2017 at 1:05 pm | Permalink


    You are back on your old horse disregarding the real economic facts.

    1) Inflation is up and not going down
    2) Consumer credit is up by more than 10% a year
    3) Consumers are already overstretched.
    4) Employment is up

    On that basis it is the duty of the BoE to look at the potential future growth in inflation and credit growth and react accordingly.

    THe BoE is just doing the BoE is just doing the job it has been asked to do. Brexit or no Brexit.

    So, why are you criticising MPC when it is just doing its job?

    • Lifelogic
      Posted November 3, 2017 at 3:01 pm | Permalink

      The real problem is rip off bank margins.

    • Anonymous
      Posted November 3, 2017 at 3:06 pm | Permalink

      So why did the MPC drop interest rates last year ?

      It hasn’t done its job for 20 years if you want my opinion.

    • Nig l
      Posted November 3, 2017 at 3:07 pm | Permalink

      You haven’t read JRs comments thoroughly. He is not saying they shouldn’t do their job. He is saying they have dampened down the economy in terms of credit, so your points 2 and 3 covered, employment up, so what? Are you looking to slow the economy down further to reduce employment and again as for inflation so what? No evidence that it is working through in wage demands.

      What he is saying I think that this is a typical cautious knee jerk when they could have waited longer to see the outcome of the other measures. There is also a budget. Maybe he thinks or knows Hammond is planning a give away and wants to take that heat out but if the Chancellor being strapped, takes money out of the economy that is a double/triple whammy.

      It is also strange that he says Brexit will slow the economy down so why doesn’t he wait? A conspiracy theorist might suggest he is doing it deliberately so his prophesy on Brexit becomes fact.

      In the meantime, sorry Hans can’t see it.

      • hans chr iversen
        Posted November 4, 2017 at 12:28 pm | Permalink

        Nig 1

        Interesting perspective but I am afraid with inflation at over 3% and far to fast growing consumer credit they should have done it before and it is not as if they are donig it fast with more than 50% of mortgages on fixed rates.

        Sorry no I cannot see your point of vies

    • nigel seymour
      Posted November 3, 2017 at 5:33 pm | Permalink

      Long may inflation stay at 3% as this uprates my CPI pensions!! I can decide what spending cutbacks I make that will negate inflation such as don’t use your car so much, cut down on your eating, eat more vegetables and less expensive meat products, cut down on interest payments, cancel all your regular subscriptions that you don’t need, have a clear out of all the crap you have amassed over years and stick it on ebay, start using Lidl or Aldi and give waitrose and m&s a rest for a while, stop buying daily newspapers and use the internet to get your news fix, cancel you charity subs until the rate comes down (they get enough public money anyway), use Spotify free and cancel your 9.99 month fee, don’t replace your Mercedes tyres with bridgestone or other premium makes buy cheap china ones (they are brilliant!!), get a new fixed rate on your mortgage, turn down your heating this winter and put on more layers when you feel the chill inflationary winds blowing up.
      I could go on and on and on and on but don’t see why I should waste my time with economic experts…I learnt my economics at primary school!

  41. Mark Watson
    Posted November 3, 2017 at 1:23 pm | Permalink

    Now Carney plucks from thin air the idea that the economy has a new trend growth rate of 1.5% before inflation will be stoked.Probably from the same fantasy box he got his idea that interest rates must rise when unemployment drops below 7%.
    He has got nothing right in his entire tenure yet some still hang on his every word.

    • Lifelogic
      Posted November 3, 2017 at 3:01 pm | Permalink

      The last rise in rates was July 2007 to 5.75 per cent, great timing, just before massive financial crisis.

    • hans chr iversen
      Posted November 3, 2017 at 3:54 pm | Permalink


      This is not Carney alone it is the MPC 7 to 2, so Carney’s vote is one of many? so I cannot see the point of your argument as he does not stand alone

      • Lifelogic
        Posted November 4, 2017 at 4:42 am | Permalink

        They clearly have the wrong nine people on the panel who chooses them?

  42. Na
    Posted November 3, 2017 at 2:00 pm | Permalink

    The £ dropped like a stone, it is trying to recover now.

  43. WalterP
    Posted November 3, 2017 at 2:48 pm | Permalink

    The BoE MPC members, are doing the best they can under very difficult circumstances. 0.25% rate rise is not too much to is not a surprise and is not going to have too much effect in the long term given the new propensity that is around for forward guidance today. Currency traders and banking have already factored it don’t know why JR is having a go again at the’s almost like it’s become an obsession.

    There is no doubt but UK’s exit from the EU and in the abrupt manner it is happening without future trading deals in place to compensate has to be the biggest factor in determining the countries prospects or lack thereof..prices and inflation are up..productivity is already down because businesses don’t know where government is going with all of this and so planning for the longer term has come to a stop..hardly the fault of the BoE. Inflation is at a five year high of 3% so economic theory calls for a small rate rise to act as a drag to the upward momentum of prices..and badly needed since wages have been stagnant for so long.. not an easy job so well done to the policy makers.

  44. ian
    Posted November 3, 2017 at 4:07 pm | Permalink

    If anybody thinks Brexit is going to change anything if you get to leave the EU, you are mistaken, with the MPs, Lords, institution and civil servants that you have at the moment, things will just roll on like they have always done, with them in charge of the laws and regs. As usual, you will be left with the propaganda from the politician and the media, while you are left sitting around wondering what happening and what went wrong. The simple fact is that hardly any of these people that you elect are in your corner and have control over who they want to run your institution and civil servants, that why I am not bothered about Brexit or voting/ because nothing will change, the only people that can make changes are you the voters, but you refuse to do so.
    While you are waiting for them to see the light of your plight, the truth is that they have already seen the light many years ago and your plight was the path they choose to take as you all know by the way things go downhill a little bit more after each election.

  45. ian
    Posted November 3, 2017 at 5:55 pm | Permalink

    DD is a wolf in sheep clothing, that why he is leading the talks.

    • DaveF
      Posted November 4, 2017 at 9:41 am | Permalink

      We can be very sure that Barnier sees right through him

  46. Caterpillar
    Posted November 3, 2017 at 7:18 pm | Permalink

    Mark, perhaps this number is about right – 1% from population and only 0.5% from tech advance. Due to demand focus, resource misallocaton and thus little net capital formation to expect anything other than population effect is optimistic. The govt and bank did not allow the shakeout and return to save and invest to happen. Rather than support banks lending the govt should have looked at tax and depreciation allowances.

  47. mike fowle
    Posted November 3, 2017 at 7:27 pm | Permalink

    It’s rather ironic, that having been granted independence from politicians, supposedly, the BOE has been holding interest rates at an artificially low level for nearly a decade, for political ends. The timing may be off, but it is good to see interest rates starting – just starting – to return to appropriate levels.

  48. Richard1
    Posted November 3, 2017 at 8:17 pm | Permalink

    these very low interest rates mandated by governments must be distorting asset prices. There is widespread agreement on this but of course no one knows exactly which assets and when and how much the correction will be. Gradual normalisation of interest rates and the end of not the reverse of QE should therefore be positive for investment.

  49. Original Richard
    Posted November 3, 2017 at 8:36 pm | Permalink

    Mr. Carney mistakenly nailed his colours to the EU remain mast during the referendum instead of saying, as he should have done, that he would do the best he could for the UK whichever way the country voted.

    Since the country voted to leave he should have either resigned or been sacked as how can we have a governor of the BoE who does not know whether to protect his professional reputation for fiscal prediction or to act in the best interests of the UK ?

    • Prigger
      Posted November 4, 2017 at 12:23 am | Permalink

      Mr Carney always reminds us of the mandate of the BoE to express its view to the public. Admirable. Like the CBI though, we cannot vote them out of their mandate when they are wrong time after time after time.Most of us would resign if we performed so universally badly in our jobs. But we have the honour so often bestowed on the humble who have no other jewel in their crown.

  50. JRzGood
    Posted November 3, 2017 at 9:13 pm | Permalink

    Any questions. Great. Well done..
    Also Labour ( and Cons ) might be surprised at 14-16 year olds perceptions.
    They are not so dim as everyone thinks. They realise about Smart phone tracking etc if not economics.
    Where’s your friend ? Fiddle with phones. She’s sat under the pier.
    Is that good that you can find her in 2 secs ?
    No , but we can do x and y to get round it.
    13, 14 year olds can recount the huge scandals in Europe re phone stalker, scammers in Europe etc not reported here.
    The old way is left v right.
    The new way is Big Brother v Freedom, subversion.

  51. Mick
    Posted November 3, 2017 at 11:17 pm | Permalink

    A lot off topic
    This guy along with all the other UNDEMOCRATIC MPs-others should be chucked in the Tower of London and the keys thrown into the Thames and left to reflect on the error of there ways

  52. Prigger
    Posted November 4, 2017 at 12:36 am | Permalink

    JR, you have often mentioned your blog is something other than a running commentary necessarily of headline news. But in these last few days you do seem to be content stirring the soup on the hearth, when the House has caught fire and the kids are throwing lighter fuel on the flames in the bedroom.

    Puritanical and a quite misinformed view of British folk’s values and behaviour is the nonsense-speak of journalists and what are now seen as pompous politicians. “Fewer” is that the preferred word of Mr Everyman Speaker to “Less” in “Fewer women will be in key positions in politics and the work-scene in the next decade or so?”. Enough is enough.

  53. rick hamilton
    Posted November 4, 2017 at 1:31 am | Permalink

    The new Defence appointment once again raises the fundamental question of competence. Politics is the only ‘profession’ in which no taxing examinations or decades of experience are needed to be given one of the most important jobs in the country. I will concede that getting elected as MP is a test in itself, which most people would not want to do, but the qualities required to get people to vote for you are entirely different from those needed to run a great department of state.

    Why do we not at least have confirmation hearings like the USA in which searching questions are asked about their abilities before anyone can start the job? Personally I wouldn’t allow any MP to become a minister who could not demonstrate real experience in controlling a substantial organisation with a large budget beforehand, preferably one that made a profit for shareholders. Any fool can spend other peoples’ money.

    It has been said before that Asian politicians talk like businessmen and British politicians talk like social workers. Still true, with a few honourable exceptions including JR.

  54. Lindsay McDougall
    Posted November 4, 2017 at 2:52 am | Permalink

    It’s not even certain that Brexit caused the fall in sterling. Sterling had been overvalued for some time and was due for a fall. Brexit hasn’t happened yet. If Philip Hammond tightens fiscal policy- by no means certain – we could see a partial rebound.

  55. Rat1960
    Posted November 4, 2017 at 3:23 am | Permalink

    We have had the EMERGENCY BASE RATE project since 2008. There had to come a time to begin the path to rate normalisation. From 1694 to 2008 the lowest the base rate ever went was 2%. The long term arithmetic [monthly] average was 4.65%. The average base rate from 1997 to 2010 was 5.25%
    No doubt Mr Carney would prefer the path to normalisation did not include Leaving the EU but it is what it is.

  • 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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