All eyes on the Fed

This Friday at Jackson Hole Jerome Powell, Chairman of the Fed, will make a most important speech. The financial markets are expecting confirmation that there will be further interest rate cuts from the USA to promote faster growth and a weaker dollar. The self same market commentators  that claim not to like Mr Trump very much nonetheless back the President’s often repeated mantra that the Fed is holding up growth and more jobs and needs to cut rates by at least 1%, almost halving them.

Others point out that the US economy is growing much faster than the European or Japanese economies already, that money growth is strong, job numbers are increasing and real pay rising. They worry that further rate cuts could fuel an inflation after a decade of no serious  inflationary pressures.

The Fed did it get badly wrong at the end of last year, when it was threatening major rate rises at a time when the world economy was slowing and markets were worried that slowdown could become recession. Jerome Powell backed off then, and reversed policy, promising not to raise rates. He went on to cut them. Now he needs to set out a new theory of how the Fed will set rates in future, to avoid the problems the current system created in 2018. The data on the economy suggests there is less need for rate cuts than many commentators suggest.

The Bank of England needs to study the work being done by the Fed as they seek a new consensus on how to run their monetary policy. UK money policy has not this year assisted the economy, being very tight at a time when the world and UK economies are slowing. The Bank has not followed either the Fed or the ECB in trying to offset some of the slowdown with monetary easing. China has now announced some more easing, alongside rate cuts from Australia, New Zealand, Russia, Brazil, the USA, Indonesia, Turley, Thailand and others in recent weeks.

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  1. Posted August 21, 2019 at 5:19 am | Permalink

    As you say:- “UK money policy has not this year assisted the economy, being very tight at a time when the world and UK economies are slowing.” Indeed plus with have the highest taxes for 50 years. The most idiotic and complex tax system too. Then we have banks that are tied up in misdirected red tape, are slow to act and are very uncompetitive (and want rather large margins and fees).

    Furthermore hanging over the economy is the very real threat (especially to England) of an appalling Corbyn/Mc Donnall/Sturgeon government. A threat that May and Hammond’s dishonesty, gross incompetence and incompetent econoic management have done so much to augment.

    • Posted August 21, 2019 at 6:09 am | Permalink

      You ignore that most catastrophic act of self-harm that any nation has done in modern times, I note.

      • Posted August 21, 2019 at 1:31 pm | Permalink

        Give up its independence and control over the supremacy of its laws to a supra national body I presume you mean.

        • Posted August 21, 2019 at 5:48 pm | Permalink

          Indeed must be that.

      • Posted August 21, 2019 at 2:11 pm | Permalink

        I agree – nationalising the railways was horrendous.

      • Posted August 21, 2019 at 2:19 pm | Permalink

        @MiC; What catastrophic act of self-harm would that be, not Brexit, perhaps you are thing about the damage Germany did to herself between 1933 and 1945…

      • Posted August 21, 2019 at 3:25 pm | Permalink

        Martin in Cardiff

        You might want to try reading a history book of the 20th Century

        Leaving a protected customs union hardly registers on the scheme of things that have happened. I’m not sure what harm you think will occur and to whom, maybe you can let us know with a SPECIFIC example ?

        • Posted August 21, 2019 at 7:01 pm | Permalink

          Libert…well we might go short on brie, piniot grigio, tomatoes and cut flowers for a few days, even a week. Pretty disastrous I ‘d say.

        • Posted August 21, 2019 at 11:31 pm | Permalink

          Well this is the 21st century and we’ve had a devastating financial crash that has left little spare money to prepare for Brexit – especially a No deal version. We’ve been hearing from councils, ports and many other sectors of society (including agriculture and scientific research) to the effect that Brexit could have serious negative consequences. We’re not in Project Fear any more – we’ve been hearing from the people who actually run these organisations.

          • Posted August 22, 2019 at 7:34 am | Permalink

            We have plenty of money for Brexit.
            We will save over £20 billion a year just in annual fees.
            Then the tariffs which will be many more billions collected than we pay out.
            Then there is the £39 billion we save as a one off.
            Then the effect of a positive post Brexit budget easing taxes.

            The ports have been saying the opposite to your claim Simon.
            The trade body representing farmers is simply lobbying for continuation of the comfy subsidies they currently get under CAP.
            Science research is mistaken to think Brexit will hurt them but I realise lobbying for continued funding is a natural thing for them to do.
            Government has said it is considering continuing these payments.
            Councils are always crying out for more funding using any reason they can think of.
            All of them are still just alarmist predictions hiding a cry of “give us more money”

          • Posted August 22, 2019 at 11:19 am | Permalink

            Simon Coleman

            Shame you only ever listen to one side of the argument though isn’t it

            We’ve heard from Port of Calais and Dover that both are fully prepared and see no real problems, we’ve heard from many import/export businesses that they are ready and able to cope. We’ve heard from the head of Pharma companies saying there will be no problem with availability of important drugs . We’ve heard from HMRC and other customs experts that theres need be no reason to implement hard border in Ireland & they have the tech to deal with it.

            What you would have to explain to me Simon is WHY there could be a problem. Yes we will have to fill out slightly different and longer forms to import/export but why would that lead to any more disruption than applying Workplace Pensions, Parental leave VATMOSS , GDPR or Reverse VAT or any other change in the regulatory landscape that we’ve had to implement in the last 5 years?

            I’ve asked remainers this so many times , yet bizarrely theres no answer other than some arch remainer CEO saying its the case but without giving any evidence .

          • Posted August 22, 2019 at 5:43 pm | Permalink

            Simon Coleman

            The CEO of Nissan said he was leaving the UK due to Brexit , turned out to be true as he was recalled and investigated before being fired , Meanwhile Nissan in Sunderland has just announced the start of production of the new Nissan Duke. The CEO of BMW UK said they were reviewing their options because of Brexit, they have now started production of the mini electric in Oxford . Airbus said they would leave because of Brexit, they are investing in UK production….. hmm do we believe words or actions?

    • Posted August 21, 2019 at 10:02 am | Permalink

      Listening to Dominic Grieve this morning on LBC just now was very depressing. I used to consider him to be a man of principle and ability but over Brexit he has gone totally mad. He really does want to destroy UK democracy, kick the voters in the teeth, destroy the Conservative party and give us Corbyn/Mc Donnall/SNP to destroy the economy.

      Meanwhile is the government going to do to get some real competition in banking so they cannot get aways paying 0.2% interest on deposits and charge about 400+ times more on overdrafts and lending even to solid customers. Where is the competition authority and the regulators?

      • Posted August 21, 2019 at 2:22 pm | Permalink

        Really? Latest polls say that Remain would win fifty-five to forty-five.

        What would be undemocratic, about a proper test of public opinion, now that a few more facts about what leaving the European Union would mean are known?

        • Posted August 21, 2019 at 6:33 pm | Permalink

          First we need to actually respect the first people’s vote

          • Posted August 22, 2019 at 6:48 am | Permalink

            That’s like saying that you’ll still go on holiday to that place whatever, because you’ve booked it, even though since there has been a coup, law and order has broken down, people are starving, and you will probably be killed.

          • Posted August 22, 2019 at 10:56 am | Permalink

            Useless analogy.
            We have already had a people’s vote and that needs implementing.
            You just want to keep voting until get the answer you like.

          • Posted August 22, 2019 at 11:23 am | Permalink

            Martin in Cardiff

            No it wouldn’t be anything like that its another in the line of stupid analogies trotted out by remainers because they lost a perfectly valid referendum

            Explain why we should put in place the result of a second referendum when we didn’t implement the result of the first

        • Posted August 21, 2019 at 10:08 pm | Permalink

          What facts are you referring to? All I hear is hysteria?

        • Posted August 22, 2019 at 11:25 am | Permalink


          Perhaps you could let us know what FACTS you have about leaving the EU that are different now.

          Go on list the FACTS

        • Posted August 22, 2019 at 5:43 pm | Permalink

          OK, what would be the rationale for leaving, if a more up-to-date vote gave a majority for Remain?

          How could that possibly be twisted as “democratic”?

          That is what worries you, isn’t it?

          • Posted August 22, 2019 at 10:32 pm | Permalink

            We must keep voting until you get the result you want seems to be your idea of democracy martin

          • Posted August 23, 2019 at 3:48 pm | Permalink


            And how many weeks after a vote to remain do we give it before another vote to see if they’ve changed their minds again?

            Implement a vote , see what happens first , then maybe ask again in a few years thats how its worked for the last 40 years

      • Posted August 21, 2019 at 3:07 pm | Permalink

        By the 1st November the ports will be virtually closed- life is not going to go on as it was before- officialdom will kick in which inevitably means ‘queues’. Queues in the sea ports, queues in the airports- especially after Priti Patels announcement about freedom of movement- everything and everybody will have to be checked. We won’t even have valid passports for worldwide travel, and old EU driving licenses even with International Licenses will not be accepted in some countries either. We are facing chaos like we have not seen since WW2- Dominic Grieve is right to be alarmed. Question: you don’t for a minute seriously think that there won’t be payback from the other side over this stupid foolish path we are about to take? There will be grave consequences- I have no doubt- most of us will become totally cut off from the rest of the world? for a few months at least, maybe a year or more= you don’t believe me?- well only seventy days to go

        Reply Nonsense. Calais wants to keep its business and knows it has to run smoothly

        • Posted August 21, 2019 at 7:50 pm | Permalink

          I guess we will have to listen to this sort of nonsense right up to Oct 31

          • Posted August 21, 2019 at 9:42 pm | Permalink

            In November when no catastrophe actually happens they will try to apportion any future negative thing to the fact we have left the EU.
            Even a cloudy day will be blamed on brexit.
            We will laugh at them and their ridiculous posturing.

        • Posted August 21, 2019 at 9:21 pm | Permalink

          “Question: you don’t for a minute seriously think that there won’t be payback from the other side over this stupid foolish path we are about to take? There will be grave consequences- ”

          This could be Hollande or Selmayr speaking.

        • Posted August 21, 2019 at 10:13 pm | Permalink

          On November 1st what will you do when none of your hysterical nonsense comes to pass? Have some sort of breakdown I imagine as your perception of reality will have disintegrated.

          I am not a robot. I have proved it many times.

        • Posted August 22, 2019 at 12:43 am | Permalink

          I really despair when I read how seemingly sensible people take all that ‘be afraid’ propaganda as the truth. That they are so gullible is depressing.

          They really do believe that the EU will punish us for our temerity in leaving their ‘organisation’. ”Grave consequences” for us, they think – but they will argue that their EU is altruistic, high minded, honourable, forward-looking, peaceable and friendly, and we should WISH to be tied close to it. Yet at the same time, they acknowledge that it is a vindictive, self-serving cabal, only to be feared.

          But they still think we should remain shackled instead of trying to escape such an terrifyingly vengeful bunch of unelected people. This truly must be ‘Stockholm syndrome’.

          (Notice that ‘crazy times’ doesn’t give us any clue as to the great and glorious future we are forfeiting by our escape.)

        • Posted August 22, 2019 at 11:30 am | Permalink

          Crazy times

          Another one who has never left his bedroom telling us how international travel will end because we left the EU

          FYI your passport is checked 4 times when travelling from UK to the EU WHILE WE ARE MEMBERS OF EU.. After we leave it will be checked 4 times still…. the only thing is that depending where from and too the queues for non EU passport holders could be SHORTER

          Thats funny because I just used my UK driving licence in USA France and Canada with no problem …how the hell did that happen

          These crazies really are totally deluded

    • Posted August 21, 2019 at 10:15 am | Permalink

      Government finally launches an HS2 review. Why a review? It clearly a mad project just cancel it. Stop all work and all the compulsory purchase now money is being wasted and huge damage is being done every single day it continues.

      I would suggest it is very like most of the “renewables” industry a corrupt (or virtually corrupt) way to divert tax payers money and land assets to certain companies.

      How many MP are acting as paid “consultants” in these areas I wonder? There is clearly no other sensible explanation for it.

      • Posted August 21, 2019 at 10:17 pm | Permalink

        I heard today that it is 400 million pounds a mile!!!!!!! Wow! The contractors must be going to make a fortune. Tarting up Reading station cost a billion nearly. The costs of public sector works is a scandal.

  2. Posted August 21, 2019 at 5:28 am | Permalink

    Until Carney is removed, there will not be any positive policy direction.

    • Posted August 21, 2019 at 7:41 am | Permalink

      Why indeed is Mark Carney still in place? Plenty of people would do the job far better for just 10% of his remuneration. His incompetence and bad decisions have cost the country billions, this on top of his excessive salary.

      Plus he has politicised the position appallingly and is full of lefty, climate alarmism lunacy as well. He is totally unsuitable and a PPE chap. How many more reasons does one need to fire him or retire him off early.

      • Posted August 21, 2019 at 10:21 pm | Permalink

        I’ll do the job, working from home, for a grand a week. My first decision would be to put base rate up to 4%. Pound up against dollar, cheaper petrol. Lower prices all round.

        I’m staying long not a robot

    • Posted August 21, 2019 at 8:02 am | Permalink

      If Boris is serious about leaving the EU he needs to flush out the saboteurs like Carnage pronto.

    • Posted August 21, 2019 at 9:38 am | Permalink

      Carney is leaving soon anyway – at which point we trust he will be brutally honest about his view of the Brexiteers. Certainly he has shown in Parliamentary committees that he has no time for the economic clowns.

      Who would you prefer as Governor? Someone like Brexiteer Lord King – the last Governor? A man so on top of his job that he missed the worst banking crash since the 1930s coming. No wonder he backs Brexit. As does failed Chancellor Lord Lamont. Why was he ever made a peer by the way? He was a car crash Cabinet minister.

      • Posted August 21, 2019 at 4:25 pm | Permalink

        So who do you admire in the worlds of politics and banking, Andy? Go on, give us a good laugh!

      • Posted August 21, 2019 at 5:33 pm | Permalink

        Lamont was a tolerably successful chancellor. He got the boot because of the ERM, a very foolish EU project strongly advocated at the time by the whole political establishment, most economists and of course the equivalents of you, the EU-federalists. To anyone with a modicum of understanding of economic issues it was obviously a silly idea. Rather like monetary union without fiscal and political union which you also support.

        The Bank of England was not responsible for bank supervision at the time mervyn king was governor, due to a foolish reorganisation by gordon brown. Nor was King responsible for Browns misguided bank bailout policy. He is widely acknowledged as an insightful and knowledgable commentator on economic history and central banking and monetary issues, but I doubt you’ve read any of his work. Nor is the conduct of monetary policy in the 2000s in any way relevant to arguments for and against Brexit.

        • Posted August 21, 2019 at 5:53 pm | Permalink

          “To anyone with a modicum of understanding of economic issues it was obviously a silly idea.”

          Or rather an appalling idea.

          Rather like the climate change act in fact:- To anyone with a modicum of understanding of energy, engineering, economics, logic or physics this was obviously a totally insane idea. Yet all but a handful of MPs voted for it!

  3. Posted August 21, 2019 at 5:28 am | Permalink

    Difficult to comprehend why on Earth Boris is travelling to Berlin today. Merkel will see this and think “we have got him exactly where we want and he is panicking”. His credibility as a negotiator is weakened when he starts by saying he won’t meet EU leaders until they agree that the backstop can be changed and two weeks later is trawling around Europe without them having moved on that point. Now all he will get is the runaround where they say that it is the UK that has chosen to leave so they don’t have to propose anything and that whatever the UK does propose is a unicorn.

    • Posted August 21, 2019 at 6:20 am | Permalink

      Yep – I would have been inclined to stay in London. The intransigence of our EU partners – demanding that we accept a deal so bad that our Parliament has rejected it three times – is a sight to behold. I used to think that May’s diplomacy was beyond-shocking but if we leave on October 31st with ‘No Deal’ then, strangely, the EU will have managed to top her incompetence. Around the EU voters, getting their increased EU Rates demands will be asking, ‘How did this happen?’

      • Posted August 21, 2019 at 3:22 pm | Permalink

        No Sea Warrior- the blame for what is happening and how it is happening rests squarely on the British side. There is another parliament as well which has representatives from twenty eight democratically elected countries- it is a big parliament and they have rights as well- they are the ones standing still- we are the ones leaving- we are the ones making the waves- it is up to us to negotiate our way out- that is if we ever want another worthwhile trade deal with them- so am afraid “go whistle” is not going to do it this time.

        • Posted August 21, 2019 at 6:37 pm | Permalink

          There is no EU Parliament as we in the UK inderstand it.
          The real power is in the hands of the Commission.
          Not one vote by any citizen of the whole of Europe.
          Appointees every single one.

          • Posted August 22, 2019 at 5:46 pm | Permalink

            The supreme power is the council of the twenty-eight leaders.

            The Commission answers to them and to the parliament.

            You haven’t even grasped the basics.

          • Posted August 22, 2019 at 10:35 pm | Permalink

            Well that’s not correct Martin.
            The power is obvioysly in the hands of the Commission and the Presidents.
            They work to enact policies to follow the various treaties.
            The Council is just where national leaders meet a few times a year for a chat.

          • Posted August 23, 2019 at 3:49 pm | Permalink


            Wow the 28 leaders passed 12000 directives… who knew

            Maybe its you that haven’t grasped how it ACTUALLY works

    • Posted August 21, 2019 at 6:48 am | Permalink

      Maybe when he returns from Berlin and as he gets off the plane he’ll wave a piece of paper declaring ‘peace in our time’.
      We need a Winston Churchill not a Neville Chamberlain.

    • Posted August 21, 2019 at 7:23 am | Permalink

      Freeborn John
      Exactly whatI thought.
      He seems to be following in Mrs M’s footsteps!

    • Posted August 21, 2019 at 7:51 am | Permalink

      It is difficult to see the EU or Merkel moving their positions while Hammond and the Gaukward squad of Libdim/fake Conservatives/Labour/SNP and the traitors are undermining the UK’s negotiation strength at every turn.

      Anyway just removing the backstop is nowhere near enough.

    • Posted August 21, 2019 at 7:55 am | Permalink

      Perhaps his colleagues who have been charged with actually doing the work to prepare to leave on the 31st Oct., suggested he leave town for a while so they can get on with their work.
      Its simple, we leave on 31st October, or the PCP will be history.

    • Posted August 21, 2019 at 8:06 am | Permalink

      He is demonstrating willingness to talk, even in the face of EU intransigence.

    • Posted August 21, 2019 at 8:12 am | Permalink

      @Freeborn John. I believe that Mr Johnson is showing flexibility so that when the UK leaves with “no deal”, he can say that he went the extra mile and tried his best… but was met with EU intransigence.

    • Posted August 21, 2019 at 8:39 am | Permalink

      The Fed- we have only to wait a few hours- so let’s wait and see what they say.

      Boris is going to Berlin and Paris- a complete waste of time- nobody over there is interested- they know where UK is going 31st Oct so will leave it all to Brussels

      Italy is of much more immediate concern to them now.

      • Posted August 22, 2019 at 11:34 am | Permalink

        Crazy Times

        I think the bigger problems for the EU are the crash in Germany the collapse of Deutsche Bank, the Eurozone meltdown, the shrinking of the Greek economy by 17% the collapse of the Italian government and massive high unemployment

        Luckily we got out just before it implodes

    • Posted August 21, 2019 at 8:48 am | Permalink

      You must try to remember, that many Tory-Leave voters do not even have the memory of the goldfish of legend, and so it does not matter to him what he might have done or said previously.

      His press and the BBC will forget it all for him and them anyway.

      • Posted August 21, 2019 at 1:32 pm | Permalink

        Typical remainer never a comment without a gratutitous insult.

      • Posted August 21, 2019 at 2:15 pm | Permalink

        my goldfish stay in hiding after the heron’s been, it takes a few days before I can coax them out with fishfood. Zero memory is nonsense.

      • Posted August 21, 2019 at 3:11 pm | Permalink

        You were doing so well. A cogent Remain contributor without insult, until now.

        • Posted August 21, 2019 at 5:33 pm | Permalink

          They don’t have any current affairs memory, because they consign that function to the media, and those controlling them will discard anything which does not fit the storyline that they are pushing.

          It is a trap into which millions fall, Remain voters too.

          Do your own remembering.

          • Posted August 21, 2019 at 11:17 pm | Permalink

            Are we meant to read this backwards from the end of your post for it to make any sense martin?

          • Posted August 22, 2019 at 6:50 am | Permalink

            If that makes it easier for you, then yes, by all means, Edwards.

      • Posted August 21, 2019 at 5:56 pm | Permalink

        It is a myth that gold fish have a poor memory. It they did have they would not have survives so long.

    • Posted August 21, 2019 at 9:35 am | Permalink

      You should not worry about Boris Johnson’s credibility – either as a negotiator or as anything else.

      He has no credibility.

      • Posted August 22, 2019 at 11:36 am | Permalink


        Your much heralded new centre party , pulling the remain faction into one place is currently on 0% ZERO in the polls. Your political judgement is brilliant

    • Posted August 21, 2019 at 9:35 am | Permalink

      Tony Connelly of the Irish RTE on the EU’s “lines to take”:

      “9/ As one EU source points out, the backstop is expressly designed to prevent a future UK govt or Parliament reneging on prior commitments. That’s the whole point of it, and why it’s needed as an insurance policy”

      Do you have any comment on that, JR? And does the UK government, or Michael Gove’s hypothetical rapid rebuttal unit, have any comment on that?

      Reply I continue to oppose the whole WA

      • Posted August 21, 2019 at 2:44 pm | Permalink

        I mean comment on the accusation that the UK is untrustworthy.

        Which is not exactly new, this is from last July:

        “However the most interesting part is the reason that M Barnier gave. He could have just said that the scheme was too complex, and might not be workable, and anyway he saw no point in it; but instead he effectively said that he could not trust us to continue to do it properly once we had left the EU and so we were no longer “subject to the EU’s governance structures”.

        That is to say, once we were no longer under the thumb of the EU Commission, backed up by the EU’s Court of Justice; and on that basis it may reasonably be asked if the EU will ever trust us to faithfully perform any deal about anything, or they will always insist that even outside the EU we must accept continued supervision by the EU institutions.”

        They forget that even if some backstop measure was in an EU withdrawal agreement ratified by the UK after the passage of an Act of Parliament it would still be open to our sovereign Parliament to expressly disapply it –
        “… notwithstanding any provision of the Act to approve the Withdrawal Agreement, the government shall fortify the UK side of the Irish border … “, – so they might as well just trust us to do what we promise.

        “The EU Bill and Parliamentary sovereignty”

      • Posted August 21, 2019 at 4:26 pm | Permalink

        We can translate the eu speak to be more accurate .. the backstop is expressly designed to keep the UK under the hooves of the eurocrats with no redress and no say. … and keep the UK paying into the eu coffers for ever.

    • Posted August 21, 2019 at 9:42 am | Permalink

      You are wrong on a few points. The EU has acted in bad faith during the alleged negotiations. It is required by the treaty to negotiate a future relationship in tandem with departure. As far as I can tell no requirement for a withdraw agreement that was a Mayhab/Merkel construct. Why di Merkel see Chequers plan before cabinet and parliament?

      We read Merkel asked for the meeting, not Johnson. What is of a concern is why Johnson and his letter make a big issue of the backstop when the whole agreement should be dead as he claimed. It is also difficult to understand how intelligent people could agree such a vassal state agreement where there are no benefits from leaving the EU.

      • Posted August 21, 2019 at 1:44 pm | Permalink

        Succinct Hope! My thoughts exactly!

      • Posted August 21, 2019 at 2:46 pm | Permalink

        Apart from your obvious misunderstanding of the Treaties, could you please state an example of the European Union’s having betrayed its word or its principles? That is what “bad faith” means.

        That’s easy enough re the UK, though, isn’t it?

        • Posted August 21, 2019 at 5:36 pm | Permalink

          The eurozone bailouts, the breaches of deficit limits, the monetisation of state deficits. The failure to reform the CAP as agreed when Blair gave up 1/2 our rebate in return for a promise. Will that do for a start?

          • Posted August 22, 2019 at 12:22 am | Permalink

            So basically both the UK and EU continue to act “in bad faith”….not sure how this factoid helps us

          • Posted August 22, 2019 at 6:54 am | Permalink

            Bad faith means duplicitousness with bad intentions. In what way were the intentions bad in those dilemma situations that you mention?

          • Posted August 22, 2019 at 11:40 am | Permalink


            Good grief man , argue black is white why dont you

            Bad intention , They deliberately removed Italian and Greek democratically elected governments . They deliberatly crashed the Greek economy to save the Euro project and implemented austerity across the EU. Please let me know if you support austerity or not

          • Posted August 22, 2019 at 5:47 pm | Permalink

            That’s a very good point Libertarian
            We hear a lot of complaints about austerity in the UK.
            Despite state spending rising every year to record levels.

            Yet those same people think real austerity in the Eurozone is either a price worth paying or just the fault of the nations involved.

          • Posted August 22, 2019 at 5:51 pm | Permalink

            Here’s an example of bad faith.

            The “pledge” made to the Scots in the independence referendum.

            The last votes weren’t even counted before it was torn up.

            If it had been genuine, then the Scots would have had a veto on European Union exit for one thing.

          • Posted August 22, 2019 at 10:38 pm | Permalink

            The SNP demanded a vote on independence and failed by a good margin to get a majority.
            There is still no majority for independence and the SNP is less popular now than years ago.

    • Posted August 21, 2019 at 12:07 pm | Permalink

      Freeborn John

      There are a lot of people getting very nervous about Boris’ intentions!

      Is he going to Brussels and talking about a transition period and coming out of the single market and Customs Union in the next couple of years, to keep the remainers off his back, or as John redwood suggested yesterday, is he seriously considering opening the withdrawal agreement, or just getting rid of the backstop whilst retaining the WA.

      If he is seriously wanting to re-open it….he’s no better than Teresa May!

      As Nigel Farage has said….I hope I’m wrong and he’s just going through the motions.

    • Posted August 21, 2019 at 12:32 pm | Permalink

      Ed Vaizey says prime minister is ‘hell-bent’ on wanting no-deal and is ‘going through the motions’ in pretending to seek new agreement.

      Let us hope Ed Vaizey is right for once.

    • Posted August 22, 2019 at 7:02 am | Permalink

      It allows him to say ‘I did try but they were unreasonable’

  4. Posted August 21, 2019 at 5:32 am | Permalink

    The problem the BoE has is the already very low Base Rate, or are you proposing that BoE interest rates should rise? Anything more than tinkering will see UK rates go negative!

    The problem in not with the BoE, never has been, the problem in the UK has been at the HMT, or more precisely the chap who in July gave up his lease on No.11…

    • Posted August 21, 2019 at 10:03 am | Permalink

      The problem is mainly the bank margins and the red tape restrictions they have.

      • Posted August 21, 2019 at 2:26 pm | Permalink

        @LL; Well that’s one way of describing the effects of Austerity, based upon political ideology rather than any true fiscal need, “bank margins and the red tape restrictions” indeed…

  5. Posted August 21, 2019 at 5:33 am | Permalink

    Low rate policy is political not economic. I would say it’s an expression of political desperation. It’s easy politics

    There’s no evidence to corroborate the suggestion that cutting rates again will lead to an expansion of capital investment which is the engine of future economic growth. A rate cut serves to prop up equities and allows cheaper State borrowing (We don’t want more debts placed upon the back of the private sector taxpayer)

    A better idea would be to reform the State and pass the savings back to the taxpayer in tax cuts. Then liberate the private sector from political imprisonment. This won’t happen because it’s politically inconvenient

    Politics is malignant and poisons all even investment decisions

    The entire universe of is now dominated by political events. It’s inescapable

    • Posted August 21, 2019 at 6:19 am | Permalink

      It is a sign that the world is not out of the woods yet as far as the crisis of two thousand and eight goes.

      Until finance is properly regulated, and staffed by people pf propriety, in all the world’s major economies the problems will persist.

      Let us remember that it was caused by phoney ratings from the US agencies, which enabled that country to export the negative equity of its poor to reckless or to naïve buyers around the world, notably here.

      • Posted August 21, 2019 at 2:09 pm | Permalink

        The fact that we have not been able to increase interest rates,let alone normalise them,through an entire economic cycle tells you we never left the woods.

        No surprise but the Telegraph today tells us that the deficit is spiralling again-heading possibly for £50 billion this year-even before “any extra no-deal Brexit spending.”

        Perhaps The Saj will announce at the Tory Party conference that he has located and acquired the Weimar Republic’s old printing presses and will have them reconditioned and operating at full capacity by Christmas.

      • Posted August 21, 2019 at 3:47 pm | Permalink


        Is there no topic of which you aren’t ignorant ?

        Prior to the 2008 crash Gordon Brown instituted far reaching regulatory control over the finance sector… that worked well didn’t it .

        There was virtually nil mortgage backed junk bonds sold into the UK market

        So you know . US Government agencies are involved in most mortgage-backed securities. These are Fannie Mae, Freddie Mac, and Ginnie Mae. Fannie Mae and Freddie Mac both buy and sell MBS.

        The crash was caused by the US government encouraging home loans and the subsequent failure of sub prime mortgages and collateralized debt obligations in the USA. In Europe , another crisis – one of sovereign debt – arose from the flawed design of the eurozone; this allowed countries such as Greece to borrow on similar terms to Germany in the confidence that the eurozone would bail out the debtors. When the crisis hit, the European Central Bank refused to reschedule or mutualise debt and instead offered a rescue package – on the condition that the stricken nations pursued policies of austerity. In the UK the crash was caused by the collapse of Northern Rock . Rather than using customer deposits as the source of funds to lend out to homeowners, it borrowed in the international money markets.
        When the sub-prime crisis hit America, those markets took fright, and stopped lending to anything that looked like it might be over-exposed to the housing market. Northern Rock was an obvious first casualty.

        Apart from that , great post

        • Posted August 21, 2019 at 5:47 pm | Permalink

          At the root of it though, was the fact that the US has nothing like the Human Rights Act. In turn that means that the usual remedy for mortgage debt arrears remains Foreclosure there.

          That, again, means that the lender gets the property equity and all, which is fine in a rising market, and why shaky loans appealed to greedy and venal buyers.

          However, in a falling market, e.g. caused by a President backtracking on an amnesty for clandestine immigrants, it is disastrous, obviously.

          Yes, concatenation effects were highly significant as you describe.

          • Posted August 21, 2019 at 9:45 pm | Permalink

            Apart from the Constitution protected by the Supreme Court.

          • Posted August 22, 2019 at 5:55 am | Permalink

            Martin you are all over the place! The summary above is a succinct explanation for the financial crisis.

          • Posted August 22, 2019 at 7:10 am | Permalink

            In April 2007, New Century, an American REIT specialising in sub-prime mortgages, filed for Chapter eleven bankruptcy protection. This propagated the sub-prime crisis, through securitisation, to banks around the world.

            Note, as I said, around the world.

            My final phrase was erroneous however in that the UK was not a major purchaser of these products, as you kindly pointed out, but the effects of the crisis owing to exposure or to suspected exposure were more pronounced here than in many countries.

            My main point stands. The US succeeded in exporting the negative equity of many of its poor.

        • Posted August 21, 2019 at 7:05 pm | Permalink

          libert ….good precis, thanks.

          • Posted August 21, 2019 at 11:21 pm | Permalink

            Indeed Fred.
            Libertarian gets it spot on as usual.

        • Posted August 22, 2019 at 12:03 pm | Permalink

          Martin In Cardiff

          When you clearly know nothing about a subject its best to stop digging

          It was the collapse of Lehman Brothers that started the crisis

          You clearly have no idea about the derivatives market , what a mortgage backed security is, who bought them ( mostly Belgian dentists apparently !!! ) and why the CDO’s and Credit Default Swaps were where the major problems lay ( ie it was an Insurance collapse rather than a financial market collapse that exacerbated the problem)

          On 18 February 2009, U.S. President announced a $73 billion program to help up to nine million homeowners avoid foreclosure, which was supplemented by $200 billion in additional funding for Fannie Mae and Freddie Mac to purchase and more easily refinance mortgages. The plan funded mostly from the EESA’s $700 billion financial bailout fund. In 2009 there was a record number of foreclosure notices issued in the US at 3 million ( “normal” years 1.2 million ) However In spite of a 21% increase in filings, the number of homes actually repossessed was 871,086 — up just 1.1% above 2008’s total.

          In the United States, the Constitution and the Bill of Rights provide broad human rights protections. Many of the rights contained in the Constitution are equivalent to rights found in the UDHR, especially those related to political and civil liberties.

          Why do remainers naively believe that the EU are the only politicians that establish rights? The USA , UK and many other countries have far better and more protective rights than the EU

    • Posted August 21, 2019 at 6:32 am | Permalink

      @Dominic; What you propose will not happen because it does not work, whenever and wherever it is tried all it does is deepen a countries economic problems – unless of course money controls are put in place to stop money leaving the country…

      You say “We don’t want more debts placed upon the back of the private sector taxpayer”, who is the “we”, and prey do tell us what the difference is between paying for infrastructure via the tax system and paying for it via the check-out, toll booth or however. Also if the state can borrow cheaper than the private sector, and then contract the private sector directly to build new infrastructure [1], why should we the end customers, mere plebs or the ‘private sector’, have to pay more (due to the higher borrowing costs) just so the unthinking can kid themselves that unbridled Capitalism is alive and health. Have you seen how much PFI is costing the tax payer?!

      [1] meaning the private sector profit, just as many such companies did from 1950s-’70s, building new motorways, new LA housing estates, schools, hospitals etc.

    • Posted August 21, 2019 at 6:44 am | Permalink

      Indeed and when this round of cutting loses its effect where will they go? It is merely putting off the inevitable and politically inconvenient.

    • Posted August 21, 2019 at 7:43 am | Permalink

      The OTT red tape bank lending rules and lack of competition are much of the problem.

    • Posted August 21, 2019 at 8:46 am | Permalink

      I’m with you.

      I won’t be taking economics lessons from Donald ‘I’m a tariff man’ Trump.

      We need to keep our powder dry for 31st October, whichever way the economy goes.

      • Posted August 21, 2019 at 6:12 pm | Permalink

        @Leaver; I think we can learn a lot from Donald Trump, mostly good, some bad. As for keeping our power dry until 31st Oct, indeed, but allowing others to know that we have more than a few caskets of the black powder is not bad thing either – which was Trumps message during his election campaign, and appears to be the message Boris is sending too, more fools those who do not heed the hints!

    • Posted August 21, 2019 at 11:19 am | Permalink


      I agree with you.

      Interest rates are at 300 year lows. Some are even negative, which should be economically impossible.

      There can be no real productive investment which would be unprofitable if borrowing were at 2%, but would be profitable at 1%. I certainly would not invest in such a business.

      The whole interest rate madness is part of a desperate rear guard action by central banks to keep the Ponzi scheme going. The only role of central banks should be to provide liquidity to the banking system as a lender of last resort. Instead they have all morphed into quasi-socialist bodies which think they can “control” the economy. No-one can control the economy, and it is madness to try.

      All we want from government is fair and low taxes, and sensible legislation. That is all. Governments do not know how to run economies. It is an impossible proposition, as all socialist governments always find. Always.

      If the only way to “stimulate” demand is to reduce interest rate from 2% to 1%, then that so-called demand is not real. We have reached the end game of this stupid interest rate theory, and the proof of that is the insanity of negative interest rates. I believe that $15 trillion of government bonds now pay a negative coupon. If that is not insane nothing is.

      Get central banks out of the job of setting rates. They are about as much use as a chimp with a dart. Let markets decide what is a fair price for credit and get government out of our lives as much as possible.

      Is that really too much to ask for?

  6. Posted August 21, 2019 at 5:48 am | Permalink

    Sorry, this is off topic, but is it true that Robin Tilbrooks case has been rejected, again?

    • Posted August 21, 2019 at 2:14 pm | Permalink

      Yes, the judge stated the blindingly obvious, that is, that the case was totally without merit.

    • Posted August 21, 2019 at 4:14 pm | Permalink

      They were waiting for a decision from the court of appeal re the first case ( nothing heard up til yesterday). Now they are bringing a second case.

  7. Posted August 21, 2019 at 5:57 am | Permalink

    Farage today in the Telegraph.

    Is Johnson planning a great Brexit stitch-up?
    My party will not enter an alliance with the Tories if they remain committed to securing an EU exit deal.

    He feels Boris is doing. I tend to think he will actually deliver as the threat from Brexit (that he clearly understated s) will surely ensure he does. We shall see.

    An excellent letter in the Telegraph compares the carbon offsetting scam used by the rich and famous for their private jet and first class light to war time rationing for all (save those who pay a fee to escape it). How on earth do these silly people think they can one day say:- “With nearly 7.7 billion people inhabiting this Earth, every choice, every footprint, every action makes a difference.” and yet then take four private jet flights in 11 day and expect anyone to take them seriously?

    Either stop lecturing others or lead by example you fools. Do they really believe the climate alarmist exaggerations and drivel they come out with? Otherwise everyone can clearly see they are just pathetic hypocrites. The BBC radio 4 even dug out Baroness Worthington (like Emma Thompson a Climate alarmist and English at Camb.) to actually defend this gross hypocrisy.

  8. Posted August 21, 2019 at 6:00 am | Permalink

    UK money is not tight. The USA is ten times the size and has entirely different risks.
    We have an independent central bank precisely because what may be politically expedient for you in the short term is almost certainly not what the economy needs.
    People have wondered if letting Yellow Hammer out was a deliberate plot to soften up the British to accept the truth when it arrives , “I mean at least thats as bad as it can get” they say. It is not .
    My fear is that rates will have to rise to support the pound in a recession and we enter a downward spiral ending with a bond strike, interest rates flying up and National catastrophe that makes food shortages and what not look like a tea party.
    I wonder what you big spending ideologies will do then ..” George George come and save us again …. please will someone run the country”
    Nothing changes . The nuts mess it up and we get the conservatives back in

    • Posted August 22, 2019 at 1:27 am | Permalink

      So Remainers say we are not an island when it comes to globalism but we are an island when it comes to economic depression and will suffer it alone… without dragging the EU into a black hole with us.

      Yeah. Right.

      This is our remaining Ace I’m afraid. We deserve a bit more respect than Macron is giving us.

    • Posted August 22, 2019 at 3:02 pm | Permalink


      You still here ? You can confidently predict all of this will happen yet bizarrely you stay.

      Thats like standing on the bridge of the Titanic as it sets sail from Southampton and saying we are going to hit an iceberg and drown, but staying on board… or to put it in simpler terms down right stupid .

      If you believed a word of the drivel you post you would be long gone

      • Posted August 23, 2019 at 5:05 am | Permalink

        Its “Downright”,(stupid ). As for the Titanic; you mean the 8000 miles of trouble free cruising, misrepresented by ‘project iceberg’. Terrific success, …grasp the opportunities for a bracing swim. ……
        Coming soon.

        • Posted August 23, 2019 at 3:56 pm | Permalink

          So you admit you have no clue what is going on ( take up your pedantry with microsoft spell check)

          Oh and you still cant answer the question as to why you are still here
          Managed to open an office in the EU yet?

  9. Posted August 21, 2019 at 6:26 am | Permalink

    Current banking practice of giving nothing to savers while charging usuary rates to those who cannot afford to borrow at all does not solve their problems. Banks are no longer partners in life.

    Bad though banks have become I sense that the real problem in the economy is government. They stifle progress by taxing to excess. We are taxed to force government political decisions, like lets all be virtuously green or to create virtue projects over which they are incapable of exerting control. HS2 comes to mind. All of which run counter to the creation of wealth both personal and national. While doing so they manage to overlook the boring but necessary investments in health, infrastructure and education. These all get the elastoplast treatment, always too little too late.

    Time is long overdue that we conduct an audit on what government should and should not be doing. We also need a tax policy that encourages individual enterprise and in its widest sense the establishment and growth of business. In two months time we depart EU socialism and protectionism for a brave new world of freedom and enterprise. Let the battle plan be right to fully take advantage of the situation.

  10. Posted August 21, 2019 at 6:32 am | Permalink

    Off topic:

    “Editorial: ‘Give us a proper alternative and the backstop can go'”

    “Downing Street did not delay in hitting back.

    The UK, we were told, was ready to negotiate an alternative and no infrastructure, checks or controls would be placed at the Border.

    The words sound reasonable but they contradict newly stated policy.

    This week Mr Johnson’s government announced from November 1 EU citizens must present passports on entering the UK. How, then, might an EU non-Irish citizen enter the North without presenting a passport?

    And how might it be presented without Border infrastructure?”

    So can we expect Michael Gove’s new rapid rebuttal unit to speedily point out that this is only to do with the freedom of movement of goods across the border, not the freedom of movement of persons, which will be continue to be covered by the same Common Travel Area arrangements as now?

    Of course not; extraordinarily there have never been any effective answers to criticisms of the government’s central policy and there are still no effective answers. In fact I begin to wonder whether this reported rapid rebuttal unit even exists.

  11. Posted August 21, 2019 at 6:44 am | Permalink

    The Fed should run its economy for the USA not for the benefit of other nations. All nations should do the same.

  12. Posted August 21, 2019 at 7:21 am | Permalink

    Good morning.

    If the UK economy is growing then why the need to cut interest rates ? We need to support Sterling and think of the impacts to the UK not ape others. I like slow sustainable growth not this;“Let’s pump up the economy just before a general election.”

  13. Posted August 21, 2019 at 7:28 am | Permalink

    The BoE is run by a raibid remainer – We cannot seriously expect him to do the right thing for our economy when he is surely working with others to try and make sure that we will regret a WTO Brexit

  14. Posted August 21, 2019 at 7:33 am | Permalink

    Oh no!
    Don’t let’s follow Denmark.
    Isn’t anyone scared of deflation any more?
    We should have just had an almighty crash in 2008 instead of all this tinkering .
    Might be on the road to recovery by now.
    I would say that all the BoE’s machinations have brought nothing but misery but I have no doubt that there are those who have benefitted hugely.
    All those soaring commodity prices and no house price crash.
    All that nice QE used by the culprits to refinance and no interest rates for savers.

    • Posted August 21, 2019 at 7:43 am | Permalink

      Can’t get out of my mind all those people who did what was asked of them all their lives being plunged into this morass of misery.
      And what of those who deregulated everything and gambled with other people’s money?
      Oh no misery for them. Just for the now redundant staff who used to man all the abandoned bank branches.
      And now despite all optimism it really looks like more Brexit cr*p.

  15. Posted August 21, 2019 at 7:38 am | Permalink

    Absolute disgrace, three years wasted and this is where that woman has left us:

    “HMRC will allocate more than 88,000 firms with an Economic Operator Registration and Identification (EORI) number in the next fortnight – double the existing number.”

    “So far, 72,000 companies have EORI numbers. Some 240,000 firms are estimated to require the status by 31 October, the point at which Prime Minister Boris Johnson has said the UK will leave the EU “deal or no deal”.”

    “Businesses without an EORI number will be unable to continue to trade with EU member states.”

    If this is not treason it is at least gross misconduct in public office.

    “Misconduct in public office is an offence at common law triable only on indictment. It carries a maximum sentence of life imprisonment. It is an offence confined to those who are public office holders and is committed when the office holder acts (or fails to act) in a way that constitutes a breach of the duties of that office.”

    • Posted August 21, 2019 at 8:34 pm | Permalink

      Dennis well said, there are few more who should be held to account too.

  16. Posted August 21, 2019 at 7:59 am | Permalink

    Sir John.
    If the commodity markets are right, especially copper and tin, it may be too late to avert the next recession, we may already be in it. Led by a global manufacturing recession, it can all too easily extend into the wider economy, usually after 3 to 9 months. Our central bankers were caught napping.

  17. Posted August 21, 2019 at 8:02 am | Permalink

    The rich (defined as people who do not have to work for a living) are
    of importance to the economy, as you write, because they spend their
    money. Savers could spend the interest on their money if rates are not
    made artificially low. If the rich are not to be treated unfairly for a greater tax
    yield, then one should be equally solicitous about the treatment of savers.

  18. Posted August 21, 2019 at 8:53 am | Permalink

    Somewhat off topic.
    Apparently a big supermarket has now gone totally bagless.
    So…the supermarkets have spent 40 years closing down environmentally friendly small shops and businesses ( butchers etc used very little packaging and were within walking distance of most) and now as a sop to leftwing bullies Extinction Rebellion et al they are making everyone’s lives much more difficult.
    Let them now ban cars from their car parks and go totally package free on all goods. And only sell goods that did not lead to the death of any orangutang. Ha! Try that for size!
    That just MIGHT make a difference to pollution.
    And it would make a great difference to their profits…so natch it won’t happen.

  19. Posted August 21, 2019 at 8:58 am | Permalink

    Johnson crawling off to Berlin today to beg Merkel for concessions. The very act of the British PM physically travelling to Berlin rather than Merkel coming to the UK is designed to emit Johnson’s intention to undermine Brexit. It is an act of subservience and weakness ala Chamberlain.

    • Posted August 21, 2019 at 6:46 pm | Permalink

      Why would the Chancellor of Germany need to come to the UK? Neither her country nor the European Union are asking anything from it.

      Are they?

      • Posted August 22, 2019 at 3:05 pm | Permalink

        Martin in Cardiff

        Well maybe because the UK is Germany’s third largest export market worth 90 billion Euros , and one of the biggest exports is cars and cars attract big tarriffs under WTO rules. The German car industry is already in slow down, and Germany is heading for a recession.

        So if you were the Chancellor of Germany with the country in the state that it is where would you go?

  20. Posted August 21, 2019 at 9:20 am | Permalink

    I find it strange the EU and Japan now share mostly negative rates, with the ECB buying up junk bonds this will only weaken demand for the Euro.

    If we cleanly leave the EU then at some point the realities of supply and demand of sterling will assert themselves and strengthen our currency.

    The US does seem to be doing well despite higher rates, this I attribute to them effectively exporting their recession (supply destruction) and looks to continue. I think the Japanese will be able to maintain the value of its currency, the Euro looks to be the next crises area as the German surplus disappears combined with a WTO brexit.

    • Posted August 21, 2019 at 1:59 pm | Permalink

      The US is running a trillion dollar deficit – with diminishing returns.

      • Posted August 22, 2019 at 8:51 am | Permalink

        The US national debt has doubled every 8 years since Reagan, likely started by Nixon taking them off the gold standard.

        Based on this the current deficit should be higher, the fact it isn’t is very interesting and a break in the trend.

  21. Posted August 21, 2019 at 9:30 am | Permalink

    In Britain, nearly all bank “lending” goes into the Property Ponzi. All it does is prop up insane house prices and exclude young British workers from owning their own home like their parents’ generation did.
    Some way must be found of directing this so-called “investment” away from increasing house prices in London and towards providing real growth in productive businesses.

    • Posted August 21, 2019 at 2:03 pm | Permalink

      You can’t taper a Ponzi scheme.

  22. Posted August 21, 2019 at 10:19 am | Permalink


    HS2 report/review to indicate advice to cancel/continue with costs expectations by end of year.
    At last…still worth determining how to upgrade / modernise B’ham to Manchester & Leeds etc.

  23. Posted August 21, 2019 at 10:24 am | Permalink

    Problem for Britain now is that nobody in Europe is prepared to take Boris Johnson at his word- they say he can’t be trusted- remember f**k business, they have his card well marked. Then last evening we got another look at things from one of the leaders of the ERG group A Bridgen who said that anyway the whole WA is unacceptable- so nothing much left to talk about. And now the UK’s great white hope for future trade Trump has called off a visit to Denmark because the Danes won’t sell him Greenland- so now what’s that you were saying about the Fed- but at this stage who cares?

    • Posted August 21, 2019 at 1:22 pm | Permalink

      I took Boris’s comment regarding ‘business’ as being directed more at the wrong-on-everything CBI than an attack on the business community.

    • Posted August 21, 2019 at 2:02 pm | Permalink

      Don’t worry The Donald,that nice Mr Bolton and the First Daughter will look after their beloved “United Kingston.”

  24. Posted August 21, 2019 at 11:39 am | Permalink

    Boris is going soft, he like his predecessor is running over there, all he is asking for is to get rid of the backstop, and keep the rest, ?
    It is the same old firm , Boris is yet to behave as the majority want ..
    Roll on the next election, Farage and his team will do the right thing by this Nation.
    No change with anyone from The Establishment, which is what has become of Westminster

    • Posted August 21, 2019 at 12:55 pm | Permalink

      The same Nigel Farage whose party is on 5% in the latest polls?

      Come election time that may not even be enough……………….. to get his deposit back.

      • Posted August 21, 2019 at 1:26 pm | Permalink

        If TBP is down at 5% what are the Conservatives back up to? The forcing-out of Theresa May makes more sense with every passing day.
        P.S. I think TBP has been a little lazy over the past few months.

      • Posted August 21, 2019 at 2:20 pm | Permalink

        if you believe the Brexit party would get 5% in a GE tomorrow -you are a bigger fool than I take you for.

      • Posted August 21, 2019 at 3:50 pm | Permalink


        You cant read TBP is on 15% in just about every poll , unless youre making up your own ( which wouldn’t surprise me in the least)

        • Posted August 22, 2019 at 3:08 pm | Permalink

          Just seen a new poll from a polling company I’ve never heard of that does indeed show TBP on 5% , however ALL of the remaining 10% has moved to the Tories .

      • Posted August 21, 2019 at 4:33 pm | Permalink

        If he took your advice, Andy, he’d be forming the next government!

      • Posted August 21, 2019 at 4:50 pm | Permalink

        Shift to Tories not Libdems. Where have you been?

  25. Posted August 21, 2019 at 12:04 pm | Permalink

    Yes the much-trumpeted arrival of the BoE governor has proved to be wrong – as he has been on almost everything.

    However, I suspect all eyes won’t be on the Fed today, but on Johnson’s visit to Merkel.


    He avoided the cap-in-hand supplicant status for a while but has returned to it now. He is talking about removing the backstop as if that solves the WA issue.

    As Peter Bone said today: why is he not insisting on a FTA which obviates most of the need for a WA?

    Why is he not insisting that the negotiations are done in line with Article 50, which clearly states that any WA must take account of the future relationship (i.e. FTA etc first, WA later if necessary).

    Also, why is he not offering to take the ‘divorce bill’ to arbitration, including the claims we will have from the UK side on our share of ECB capitalisation, asset shares, not paying pensions etc?

    I started out with a good feeling on Boris, now I’m worried that it’s just more fudge.

    It seems that the only way we can leave now that will save the Conservative party is on WTO terms. If he signs anything like the WA, I will be voting Brexit Party – they’ve said that they are there for more than Brexit, they are there to sort out the mess of modern politics. We may yet need them to do just that.

  26. Posted August 21, 2019 at 1:18 pm | Permalink

    The US, the UK and indeed all nations should use inflation targeting as their primary parameter in controlling interest rates and money supply. It works and avoids quarrels between central bankers and politicians. The inflation index chosen should include asset prices, especially house prices. It is not just the man on the Clapham omnibus who spends money.

  27. Posted August 21, 2019 at 1:20 pm | Permalink

    I would be less than sure that the Fed is still relevant given the view that we now live in a post-monetary policy world where even if central banks alter interest rates, market reaction will be so muted that such measures will be ineffective, especially so when trying to generate economic activity by cuts.

    O/T – Now an HS2 review! Have we at last got a Government with common sense and on the side of the people? “Yes” is looking like the answer: confirmation will be beyond question when the Scottish Secretary announces progress in talking a real estate deal with Donald Trump.

  28. Posted August 21, 2019 at 1:38 pm | Permalink

    Does anyone think there is a case for raising rates to stop the economy overheating during the Brexit bounce after October 31st?

  29. Posted August 21, 2019 at 4:55 pm | Permalink

    Listening to Boris Johnson press conference in Berlin today I am reminded of the words of that great Freddie Mercury song ‘the great pretender’, when Boris- talking about world affair had occasion to say- “in my experience”- i was just stuck to the spot? couldn’t move

  30. Posted August 21, 2019 at 5:08 pm | Permalink

    Off topic, reportedly Angela Merkel thinks a “solution” to the backstop could be found in the next thirty days.

    Well, on the one hand I would point out that for the EU the obvious answer has been at hand for at least twenty two months:

    and it lies in the UK passing and strictly enforcing a law to control what can be legally exported across the land border into the Republic.

    So that Elmar Brok need no longer concern himself about a threat to the integrity of the EU Single Market with this or that rubbish from the US being taken across:

    Theresa May could have proposed this long ago – her assistant claimed that she had read the letter about it that I had sent her, and she had taken the idea on board – but instead she decided to listen to Carolyn Fairbairn of the CBI and collude with Leo Varadkar to use the border as a pretext to keep us under swathes of EU laws in perpetuity.

    But on the other hand there is a question whether the EU would trust us to actually keep and enforce such export controls, given that in their eyes we have apparently somehow acquired this reputation as law breakers.

  31. Posted August 21, 2019 at 6:24 pm | Permalink

    I am still very worried about the noises coming out of Germany ,Johnson and Merkel. The undue emphasis on ditching the backstop as if it were the only barrier in the WA. Most of us know that the WA is a very toxic document only paralleled by the Treaty of Versailles, and subject to similar negative consequenses. Boris is playing a very difficult political hand with grave consequenses for the conservative party and the UK as a whole if he gets it wrong. I suspect Boris needs to be briefed by those who really know the full implications of the WA.

  32. Posted August 21, 2019 at 6:38 pm | Permalink

    I believe the Fed’s days are limited and that President Trump will restructure banking in the USA, which obviously will have huge consequences globally, which will include the UK. It is possible that we will return to the gold standard as a situation where a vast private banking enterprise holds so much power, with no checks, means that abuse of that power is a virtual certainty. It is this apparent abuse of power that P President Trump is fighting. His actions will of course have global consequences.

  33. Posted August 21, 2019 at 11:58 pm | Permalink

    With Boris in Berlin I am not sure how you can write all eyes on the fed. Maybe it would have been better if voters were looking at the Fed as the sight of the 6th visit of a British PM to berlin since the referendum was not a pleasing sight. Why on Earth to do they feel they have to chase a will of the wisp? They only look stupid running around Europe being given the run around.

  • About John Redwood

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

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