Central Banks fight recession- where is the Bank of England?

The Bank of Japan has promised “ample liquidity”  whilst the US Fed says “We will use our tools and act as appropriately to support the economy” .

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45 Comments

  1. Shirley M
    Posted March 2, 2020 at 8:44 am | Permalink

    The ‘establishment’ is still working for the EU, as they have been all along. They may get paid by the UK taxpayer, but their political masters are not the UK government, or the electorate.

  2. jerry
    Posted March 2, 2020 at 8:56 am | Permalink

    The real question might actually be, why do other countries central banks feel the need to keep stating the bleeding obvious!…

  3. Martin in Cardiff
    Posted March 2, 2020 at 9:11 am | Permalink

    This country has a housing crisis, caused by a property bubble, largely promoted by lax, cheap credit.

    The last thing that it needs is to worsen the position.

    People have little to spend because their last brass farthing is spent on servicing loans or on rent.

    That, precisely, is the glaring problem which needs address.

    • Shirley M
      Posted March 2, 2020 at 3:37 pm | Permalink

      This country has a housing crisis, caused by mass immigration, largely promoted by Parliament chasing higher overall GDP.

      Fixed it for you.

      • jerry
        Posted March 2, 2020 at 7:48 pm | Permalink

        This country has a housing crisis, caused by not building enough houses.

        Fixed that for your Shirley M…

        In the 1950s, in one year, a Tory government had over 1m new homes built. If the country, under a Tory govt, could do that whilst chasing higher over all GDP so to pay back massive war debts [1], whilst still also sorting out the grave economic errors of the 1945-51 Labour govt, why couldn’t a Tory govt between 2010 & 2019 have built even half that number of houses?

        [1] a debt far greater than that caused by the 2007-8 international banking crash

      • Martin in Cardiff
        Posted March 2, 2020 at 8:07 pm | Permalink

        So how come we have streets of houses for a pound each in Liverpool, County Durham etc.?

        And why did house prices fall sharply from 2008 to 2011? Population was still growing for reasons including immigration, wasn’t it?

        Yes, immigration is a significant factor in population growth and in demand for housing, but there are larger ones still governing price, local market outlook probably being greatest, followed by ease of credit and low interest rates.

        • Fred H
          Posted March 3, 2020 at 5:09 pm | Permalink

          you’ve done the houses for a £1 before, and been told they are wrecks, in a rundown, vandalised, crime ridden area where any items left for rebuilding the property will be stolen dmaged or wrecked. A great deal!

          • Martin in Cardiff
            Posted March 3, 2020 at 6:03 pm | Permalink

            OK, what about the price fall 2008-2011 then?

      • Mike Wilson
        Posted March 2, 2020 at 11:07 pm | Permalink

        Only you haven’t fixed it for him. Since the 1960s we have had one house price boom after another fuelled by credit booms the banks and successive governments encouraged. A 3 bed semi in West London, where I grew up, could be bought for 15k in 1970. That house will now cost five hundred, thousand pounds and you’d have to be in the top 5% of earners to afford it. And you think this is because of a few million immigrants over the last 15 years! You are deluded. The goveryloves high house prices because it creates a feel good factor amongst home owners.

        • Edward2
          Posted March 3, 2020 at 7:41 pm | Permalink

          London is a world city and its prices are like LA or New York or Paris.
          But there are still many houses for sale at £100,000 or even less.
          A quick internet search shows lots of such houses near Cardiff for example.

          • hefner
            Posted March 3, 2020 at 10:18 pm | Permalink

            Thanks for the information, I’ll pass it to my son working within the M25.

          • Edward2
            Posted March 4, 2020 at 10:28 am | Permalink

            Yes you do that Hefner.
            Glad to be help.

          • jerry
            Posted March 5, 2020 at 7:19 am | Permalink

            @Edward2; Yet you dislike the idea of HS2, if you are seriously suggestion that people live in Cardiff but works in London, commuting every day, is that not a recipe for needing HS4, and how long before Cardiff house prices equal those in London?

    • NickC
      Posted March 2, 2020 at 4:12 pm | Permalink

      Martin, The UK could have left the EU three years ago if it wasn’t for people with your views in the media and in the establishment. That would have encouraged a few million migrants to go home, and stopped the influx of about a million. So demand for housing would have been dramatically cut, thus bursting the “property bubble”, and lowering house prices.

      • Martin in Cardiff
        Posted March 3, 2020 at 8:09 am | Permalink

        No, the even if what you claim were true, the bubble would have been sustained irrespective of cost.

        Immigration from the European Union has been largely replaced by that from the rest of the world now anyway.

    • Lynn Atkinson
      Posted March 3, 2020 at 10:57 am | Permalink

      Building new houses is not ‘green’. It’s carbon wasteful! Especially when we have a massive stock of empty, better constructed, unsaleable property stuck on the books because of Government tax policy. All our existing houses need is insulating.

      Boris, being green, will surely stop punishing the owners of ‘second-hand’ houses in favour of the profligate Corporate house builders who deliver what can only be described as badly built warehousing communes on flood plains and water meadows!

  4. Iain Gill
    Posted March 2, 2020 at 9:47 am | Permalink

    well when the new boss of the Bank of England has been in the FCA in charge of governance of the Financial Ombudsman Service, and personally knows about Fraud, Misfeasance in public office, breach of the Human Rights Act, breach of the Data Protection Act, Corruption and so much more in the FOS and has done absolutely nothing whatsoever to address that…

    then expecting him to somehow produce good results at the Bank of England is laughable

  5. DOMINIC
    Posted March 2, 2020 at 9:58 am | Permalink

    The BOE is a political organisation not a central bank. It’s become a leftist, activist organisation in the same vein as the CPS, OFCOM, the Judiciary, the BBC and on and on. Is there no corner of this nation and our lives that these people haven’t infected with their politicisation of our world? And the tragedy? Your party’s part of the problem not the solution.

  6. formula57
    Posted March 2, 2020 at 10:07 am | Permalink

    As you may have seen, a Fed rate cut is expected to happen this morning (US time) by the market.

    How low will rates have to go to induce people to resume booking cruises? (I know the rate cuts are aimed at helping distressed financiers and borrowers.)

  7. acorn
    Posted March 2, 2020 at 10:11 am | Permalink

    What exactly are you expecting the BoE to do JR? “Central banks running low on ways to fight recession, warns Mark Carney”! Governments’ should consider fiscal policy tools, such as tax cuts or public spending increases when tackling a downturn said Christine Lagarde.

    There is no such thing as a politically and operationally independent Central Bank in a fiat currency economy. It is just another outfit created to take the blame away from neoliberal politicians. Your problem is you are rapidly running out of others to blame.

    • NickC
      Posted March 2, 2020 at 4:21 pm | Permalink

      Acorn, Strictly speaking we have not got a “downturn” yet. The global economy has suffered a demand shock and a supply shock at the same time. We’ve already seen massive “inflation” – face masks tripling in price. But people are putting off purchases (apart from panic buying food and essentials) which may result in other prices dropping. It is a very bold person who would predict what the next 12 months could bring.

  8. villaking
    Posted March 2, 2020 at 10:17 am | Permalink

    Perhaps you missed the BOE announcement?

    • Lynn Atkinson
      Posted March 2, 2020 at 8:04 pm | Permalink

      Oh no! I heard Carney in a virus panic! Trying to scare the markets when his job is the opposite.

  9. Martin R
    Posted March 2, 2020 at 10:34 am | Permalink

    Where is the Bank of England? Probably obsessing about the weather, or the climate as they call it.

  10. Lifelogic
    Posted March 2, 2020 at 10:43 am | Permalink

    Think!

  11. glen cullen
    Posted March 2, 2020 at 10:45 am | Permalink

    Last week the government released its UK EU trade position
    Today the government released its UK USA trade position

    Only one of them reads as an FTA and the other a Political/Social alignment deal

  12. agricola
    Posted March 2, 2020 at 11:45 am | Permalink

    If the UK Government and our Chancellor decide that they require greater liquidity in the UK then they should tell the Bank of England to facilitate it. Additionally the message should go to the high street banks. Essentially responsibility for finance has returned to the British Govervment. That is where to ask the questions.

  13. John E
    Posted March 2, 2020 at 12:33 pm | Permalink

    Central banks don’t make vaccines.

    This isn’t foremost a financial markets issue, it’s a real world one, or maybe both. In any case markets especially in the US were clearly overpriced going into this. It was just a case of people buying because prices were going up so people bought some more so prices went up more etc. That’s all fine while it lasts but inevitably ends badly.

    Having people believe they can invest without risk because the central bank will always give them more money is foolish.

    I am very pessimistic about this situation but I would save what monetary ammunition is left for later. There’s no point stimulating demand now when the factories of the world in China, South Korea, and Japan cannot supply.

  14. Ian Wragg
    Posted March 2, 2020 at 12:59 pm | Permalink

    They are awaiting instructions from Brussels.

  15. agricola
    Posted March 2, 2020 at 4:39 pm | Permalink

    A thought to consider. HS2 is now going ahead. Using it should get you from Birmingham International to London in around an hour, about the same time as from LHR to London. Why not develope BHX airport into the major hub for passengers and freight rather than perpetuate the fight for another runway at LHR. The ultimate destination for all the extra passengers and freight at LHR envisioned by a third runway are not necessarily going to end up in London. They could be destined for anywhere in the UK and readily shuttled to the nearest appropriate airport. Please give it some thought.

  16. Ian
    Posted March 2, 2020 at 4:40 pm | Permalink

    Well it is an outrage that this is aloud to carry on.
    We have had an election, The chosen Tory Party are in with a super majority.

    Yet the same corruption of Democracy is allowed to carry on.
    Frankly nothing has changed.
    I for one am delighted that Sir John has thrown this in our faces, and another wake up call for the Party, to take the gloves off, and sack the damn lot, including , I have to say yes The Lords
    We must believe just what we see what and we hear.

    Yes the Fith Column is business as usual!
    Nothing has changed, what a tragedy for our dream of Democracy

  17. acorn
    Posted March 2, 2020 at 6:22 pm | Permalink

    I tell you one thing that is a bugga for number crunchers in the UK. We are now being locked out of EU data banks we previously had access to. I keep getting “access denied”. Alas, I have alternate routes to get the numbers I require for my daily number crunching requests. I get the impression that the EU is playing hard ball. There again, why would I expect anything less.

    • agricola
      Posted March 2, 2020 at 8:49 pm | Permalink

      Can you inform the ignorant. What numbers related to what subjects do these data banks contain. To what UK activities do these numbers in EU data bases relate. If the EU are behaving as you suggest then it makes any cooperation with them on the new GPS navigation system very dangerous. We have in fact to revert to being self sufficient.

      • Lynn Atkinson
        Posted March 3, 2020 at 10:52 am | Permalink

        Quite! ASAP.

      • hefner
        Posted March 3, 2020 at 3:23 pm | Permalink

        (The first phase of) Galileo became operational in 2016 and could very easily work without any UK participation.
        If the UK decides to stop collaboration with the EU, it would likely have to fall back on the US GPS. I would not call that being self sufficient.

        • Fred H
          Posted March 3, 2020 at 8:39 pm | Permalink

          Hefner – – I understood it was the frequent ‘childish’ threat from the EU to try to disrupt everything UK with the intention to frighten and persuade us to stay trapped in membership. The EU threat will have to do all the phased tech development on their own, while we are capable of doing it all ourselves – at a cost. So be it.
          Friends? Yeah right.

      • Martin in Cardiff
        Posted March 3, 2020 at 6:33 pm | Permalink

        The zealous say that the UK wouldn’t even grow or rear its own food.

        Self-sufficient?

  18. Narrow Shoulders
    Posted March 2, 2020 at 6:37 pm | Permalink

    Off topic – is disabling doors to retail banks a criminal offence?

    How much leeway must we give to eco-protesters?

    • Lifelogic
      Posted March 2, 2020 at 8:07 pm | Permalink

      Far to much and they are encouraged by the BBC and even some members of the royal family.

    • Fred H
      Posted March 3, 2020 at 5:34 pm | Permalink

      when protesting disrupts and does damage to property and peoples’ freedoms – arrest and make penalties bite.

    • rose
      Posted March 3, 2020 at 8:56 pm | Permalink

      The suspect wasn’t arrested.

  19. Lynn Atkinson
    Posted March 2, 2020 at 8:02 pm | Permalink

    Carney remains. Hopeless!

    • Lifelogic
      Posted March 3, 2020 at 3:58 am | Permalink

      Indeed we are still suffering from the very many appalling decisions of George Osborne.

  20. Iain Gill
    Posted March 2, 2020 at 11:01 pm | Permalink

    hey john love you, and this site

    🙂

  21. rose
    Posted March 3, 2020 at 8:44 pm | Permalink

    But these banks aren’t trying to discredit Brexit.

  • 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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