Let’s start with some agreement. I agree the Bank needs to improve its forecasting and the communication of its findings.
I do not agree that all Central Banks made worse forecasts over covid and Ukraine. Mr Bernanke seems to ignore China, Japan and Switzerland who kept inflation down despite the swings of oil and food prices. Their forecasts remained nearer the mark.
I do not agree that more highly paid people and more spending will provide the answer. The Bank has a lot of intelligent well qualified people. They need to correct their errors and change their thinking. The models need improving, but they have the people to do that.
It would be a good idea for the Monetary Policy Committee to look at the quantity of money being created and the velocity of circulation, and to provide comment, if only to say they have a good reasons to think creating lots of money will not be inflationary or destroying lots of money will not be recessionary so others can challenge this. Those outside the Bank that did look at the ballooning of the Bank balance sheet and money supply and warned it could prove inflationary got the forecast right even if the Bank is still sure they got the reason wrong. It would be better to have this argument around the MPC table. Why did the MPC who think inflation comes from other sources not manage to predict what happened? The MPC itself needs greater diversity of economic thought. Having someone on it who got the inflation outlook right in recent years would be a good start.
It is also a big disappointment that Mr Bernanke did not consider the impact of the waxing and waning balance sheet of the Bank. Decisions about the bond buying and selling need careful consideration as well as the interest rates. Their strong connection to public finances is also important for their impact on the economy.
April 13, 2024
Anything, absolutely anything BUT monetarism.
If you understand political economy, left right or centre, you are a monetarist. The quantity of money is politically neutral. It is a law around which there is no survivable path.
We need to dispense with all those who have not mastered their subject, before they bankrupt the entire west.
April 13, 2024
Trying to understand what happens in an economy when our rulers take certain actions is no bad thing. There is no ‘one way good, other way bad’. Circumstances dictate. Our problem is that the recent political leaders accept they must rely on the ‘expertise’ of those who have studied the subject, but such experts suffer from the hubris that they can change outcomes for the benefit of the politicians. We have tried to eliminate the economic cycle, where the cycle end is the destruction of the inefficient and obsolete, allowing development of the new and better. Recessions are necessary. Delaying recessions makes the inevitable worse. We need to understand that Darwinian economics is real and, probably, inescapable.
April 13, 2024
There is a way which works and several that donât. We have tried them all and should have learned something!
Bad businesses are driven out by good ones in a thriving market, because the people choose where to spend their money.
In rigged markets and therefore rigged recessions, itâs often the good businesses (privately owned and hugely taxed ones) that are driven out of business by the ones its taxes subsidises.
April 13, 2024
Agreed, there is the obvious case study; canals and railways. We are now entering the ‘post railway’ epoch, IF ONLY government would stop national ownership and subsidising an unattractive and uneconomic service. One could look at a number of other industries. Let demand lead the investment.
April 13, 2024
In the UK often efficient but law abiding, tax paying, minimum wage paying businesses are driven out by black market businesses employing illegal workers – often uninsured and dangerous for both workers and customers.
April 13, 2024
The bank has lots of intelligent and qualified people…..
Qualified at what, forecasting is guesswork pure and simple otherwise they wouldn’t always be spectacularly wrong.
Most of these advisors are leftards who believe in high tax, big government so this influences their guesses.
A change of experts is surely needed.
April 13, 2024
At school we had various pots and wooden things in one of the quads.
Apparently they were for weather forecasting carried out by more scientific brains than mine.
Maybe the BoE has some of those, adapted with a few nuts and bolts, for the economy?
Alternatively a wetted finger thrust upwards is fairly accurate?
April 13, 2024
How come UK financial analysts in private equity firms are better at modelling what is happening in the country and world than useless BOE/historian Bailey?
OT,
JR,
We have treacherous Cameron negotiating with EU over Gibralta! Can we expect another Sunak EU sell out like N.Ireland? Alternatively, do we get another rerun of his lies how he changed the EU?
April 13, 2024
Forecasting is NOT guesswork. People who understand their subject, any subject, can calculate and âpredictâ what will happen under certain circumstances. They then amend the circumstances to get the required outcome.
For instance my husband worked in the city as an energy specialist. At one point he was the only one to refuse to fund a new field, on behalf of the merchant bank which employed him, because HE KNEW the oil price was going to drop. It did. The question is, why did the other âexpertsâ not know that?
April 13, 2024
Well you cannot really know for certain as rather unpredictable events like Putins war, Covid, a ship blocking a shipping canal for weeks, new technology or oil discoveries, practical fusion technology ⊠can throw everything out of kilter. Predicting climate in 100 years when they cannot even predict the climate for next years or the volcanic activity, meteor impacts or sunspot activity next year is clearly rather impossible with any accuracy.
As impossible as predicting the lottery balls or the outcome of a game of snooker when just one tiny bit of grit falling off a flies leg might change the whole outcome.
April 13, 2024
Only a fool would attempt to predict anything much in 5 years much less 100 years. Thatâs why budgets are for the forthcoming year!
The Ukraine war started in 2014. We had plenty of time to assess its ramifications. We also know that the EU/Biden White House apparatchikâs are off their trolly and will do anything, including blowing up Germanyâs lifeline aka Nordstream.
Self-harm is predictable! We knew Sunak/May etc were going to attack Brexit, for example. Thatâs why we did not vote for them!
April 13, 2024
A sweeping removal of the entire crew would be more appropriate.
April 13, 2024
@ Lynn. I agree. Technocrats wedded to Keynesianism, which they don’t really understand even. They will not welcome change.
April 13, 2024
They government choose the economists who tell them what they want to hear. Which is to go ahead and spend/waste even more money. Pay people to dig holes and fill them in again. Or the modern equivalent build roads then block and constrict them or blow up power stations with grinning halfwitted energy ministers standing in front of them.
April 14, 2024
The ‘system’ is broken. Irrespective of what economic theory you use, when you distort the good old adage of ‘supply and demand’ where, demand always outstrips supply, (ie MASS IMMIGRATION & unfettered access to public services) the State cannot control its books. It is like giving a spendthrift teenager your credit card with no limits. No matter how much you earn you are always going to be in deficit.
April 13, 2024
Why don’t we hear more about your contribution to this country in the papers? Is age a factor here? If so, Sunak should have woken up sooner as it might have stopped the coming disaster he has brought on us.
Reply The UK establishment likes being wrong and ensures anyone who disagrees intelligently is kept off mainstream media.
April 13, 2024
Reply to reply It’s more to do with them liking the latest Groupthink fad I think. Look how the Post Office illuminati all got it wrong because the fashionable in-house idea was that an unbelievable number of sub-postmasters were dishonest.
April 13, 2024
+++
And believing that if a few innocents were absolved the truly guilty would â get away with itâ.
Imagine thinking like that!
April 13, 2024
don’t do audits they might prove us wrong!
April 13, 2024
JR,
14 years in Govt. with 85 seat majority could have changed anything. Your party and Govt. chose to continue to act against the public mandate to leave EU act in lockstep and prevent divergence, it chose continuity Blaire, built on Labourâs high tax, big state, mass immigration.
Can you remember take back control of laws, borders and money? Your party failed on these three central issues to get elected in 2019! Sunak still implementing EU law into domestic legislation not scrapping 4,000 EU laws, no border controls plus 3.5 million welfare claimants imported over two years, still giving EU money and contracts like Navy ship building! Also gave away N.Ireland! Not establishment, Tory party.
April 13, 2024
Think for one minute that they knew the system was rubbish, and that they believed they had the POWER to brazen it out and did not care a jot for the scapegoats.
This is called EVIL and most British people simply cannot accept that evil exists. Thus the Evil are allowed free reign.
April 13, 2024
I think most people know evil exists. Even with evil thugs dressed in smart suits. People pushing dangerous vaccines into people who had no need of them, taking countries to wars based on lies, people who lie that the Vaccines were unequivocally safe when the stats clearly show they were not remotely so, people who prosecute people whom they know to be innocent, people who lie about science and fiddle results for research grant incomeâŠ
April 13, 2024
On my experience the English will bend over backwards to find an excuse for every evil on earth. The most common being âitâs incompetenceâ. Funny how incompetence always works to the incompetentâs benefit.
April 13, 2024
or I’m a (lay) preacher – I can do no wrong!
April 13, 2024
L.A. and L.L., +++++
You can rely on it, your conclusions are not lost to the winds.
My own vote will not be cast in favour of wickedness, indeed it will be cast against perceived wickedness, and I cannot conclude otherwise than that there is more than incompetence and perversity at work.
April 13, 2024
Group think rules. Climate alarmism is another example. As were claims that the Horizon IT project was “robust”. When group think rules, actual evidence is ignored or suppressed.
April 13, 2024
Reply to reply:
For far too long the U.K. establishment has been able to afford to be wrong because of its inheritance and because of its wealth creating population. They apologise for the unparalleled success of our forebears and do their best to drive the native British from Britain, replacing them with wealth-consuming people for whom they believe they donât need to apologise.
The crunch is imminent.
April 13, 2024
WooHooo!
Spot on!!
April 13, 2024
+1
April 13, 2024
Indeed âThe UK establishment likes being wrong and ensures anyone who disagrees intelligently is kept off mainstream media.â
âGroup thingâ collective establishment insanity is everywhere. This on big state economic policies, net zero, renewables, state monopoly healthcare, heat pumps, EVs, not fracking, absurdly high tax levels, the BoE, low skilled open door immigration levels, the ERM, the EURO, road blocking, state virtual monopoly educationâŠ
April 13, 2024
Group think is merely the act of following the herd like sheep, don’t engage brain, none required.
April 13, 2024
Yet fixed rules are disputed on behalf of the elite. As a married couple, you can only nominate one PPR for CGT relief purposes. No ifs no buts.
April 13, 2024
Indeed and not if one has (perhaps) actually been let out, was any rent received or any barter involved. Also there is the single occupancy council tax issue and the electoral law home declaration issue.
All small beer but given her history of attacks on others she really need to come clean on all of these issues.
How many nights did she actually stay at the ex-council property if any, was any rent received, has the husbands house been sold and was CGT paid on that one, was the electoral declaration correct, was she entitled to the council tax single discount?
April 13, 2024
Did the neighbours hear her playing music/tv/having arguments?
Front door banging on way out?
April 13, 2024
Charles Moore today âThe Cass Review shows itâs a disaster for professionals to confuse opinion with expertise
From trans to climate change, experts are too often allowing their own prejudices to taint their judgmentâ
Alas money and group think is so often is driving their prejudices. The Covid vaccines coerced into people most of who had not need of them was a tragedy and surely a crime and driven by money, greed and group think.
Andrew Bridgen was absurdly fired (surely approved of by Sunak) merely for saying: âAs one (Israeli) consultant cardiologist said to me this is the biggest crime against humanity since the holocaust.â Well we shall see just how many ultimately die or are injured by this group think lunacy will it perhaps be even more than the numbers who will die if we really go for net zero? Will either actually cause even more deaths than the holocaust or Chairman Maoâs 60 million?
April 13, 2024
Record rises in long term sickness benefits reports the Times today with some affluent areas 30% up in one year. So what is causing this huge jump? NHS delays, net harm vaccines, psychological, post lockdown effects, taxes so high that work so often does not pay after tax and costs of working�
April 14, 2024
possibly lack of jobs with any sort of medium to long term future.?
April 13, 2024
EDI, the woke lunacy, the Millennium Dome, bombing Libya, Blair idiotic counterproductive warsâŠ
April 13, 2024
HS2
April 13, 2024
@Linda Brown
“The UK establishment likes being wrong!”
I’m sorry, but your reply, SJR, it’s really not funny, it’s serious, but that did make me laugh!
Reply It was meant to report the truth. Just look at the Bank’s run of boom/ bust cycles – competition and credit control, exchange rate mechanism, new global banking model and then Quantitative easing.
April 13, 2024
Reply to reply
++++++
What a wonderful statement!
Just about sums it all up.
April 13, 2024
@ Linda Brown “Is age a factor here?” – perhaps: Sir John has much experience and it too easy to forget that he is comparatively youthful, well under age to be U.S. President in these contemporary times for example.
April 13, 2024
Mr Bernanke was obviously brought in to provide support for the existing policies of the BoE, not to tell them where they wrong.
An old political tactic to confirm that establishment is correct in all it does and we prols must keep straining under the yolk.
April 13, 2024
+++
Yes.
I reckon you are right.
I thought it all sounded a tad fishy.
April 13, 2024
@ BOF – exactly so: it was inevitable that “It is also a big disappointment that Mr Bernanke did not consider the impact of the waxing and waning balance sheet of the Bank”, him being responsible for the huge wax way beyond anything seen before in the Federal Reserve’s balance sheet.
My own M.P. will doubtless rejoice in Mr. Bernanke’s silence on that point, being convinced that any and all comment should be withheld to better preserve the Bank’s independence.
April 13, 2024
Quite agree; I think a good deal of care was put into the choice of Mr B to do this job.
April 13, 2024
Apparently Mr Bailey does not do hindsight.
That is why he has not learnt anything.
April 13, 2024
Bond buying is done for two reasons 1) support civil servant final salary pensions by pushing up demand for bonds 2) support future bond sales to support an enlarged civil service.
The Bank of England is run by and on behalf of civil servants.
April 13, 2024
Not read the report, but I guess it will be like any other Government report.
No person named or shamed.
Vague comments about its workings
Reasons for any underperformance many and varied, but non specific
Recommendation that Improvements can be made, but no real solution given.
Staff have been working under pressure.
External reasons for any failure.
Lack of investment has lead to underperformance.
There you are, done in 5 mins at no cost !
April 14, 2024
Alan, You might be on to something – it all sounds so familiar!
April 13, 2024
I wonderâŠhas there ever been an in depth review of who took their eye off the ball pre 2008? Who continued lending? How about subprime? Who, as a remedy, discovered QE?
Donât think things have got a great deal better really since those unexpected events.
Next time I burn my cakes I will call in King Alfred!
AnywayâŠhavenât we always caught a cold when the US sneezed?
April 13, 2024
I’ve not read this report but I suspect it makes no reference to the Europhile, Socialist political bias that now infects most of the decisions taken by publicly funded bodies including the pro-EU OBR and the BoE governor. And that’s the problem. Zero objectivity. Zero concern for accuracy and relevance. Total focus on lies, false data (as we see in the US under Obama’s lackey in the WH) to produce the necessary political outcomes
Most of the economic data pumped out by central bodies today is pure crap, invented and made up. The US is rife with this concoction with the FED doing its best to prop up the Obama state
As with everything today in this new progressive dystopia, reality is no longer reality
April 13, 2024
Once again. Utter failure from executive management. You would think they would have realised their systems were not fit for purpose going back umpteen years. Legacy meaning manual transfer from one to another and not even considering some important aspects of the economy were not included.
Andrew Bailey says he doesnât do hindsight and wonât apologise for the massive problems he has caused. No surprise the culture of continuous improvement has passed the public sector by.
And again we see no pushback from the government. Tell us why Sir JR. . Almost as if they have some sort of blackmail leverage to make them stay quiet.
Another public institution not fit for purpose. In the private sector the CEO would resign. Why isnât Andrew Bailey sacked. No one can have any confidence in him.
April 13, 2024
Who chose Mr Bernanke and how much was he paid?
April 13, 2024
I agree with Sir John.
I would add: can the Bernanke report be effective if it addresses the Bank of England only? If we are looking at the effects of groupthink, do we need to consider the Bank, the Treasury and the OBR together?
April 13, 2024
Print money, get inflation. It’s not difficult to understand.
April 13, 2024
Correct
April 13, 2024
As the Conservatives let the BoE mark their own homework by allowing the BoE to choose who should lead this inquiry there is little point in them complaining when the report, in general, finds the BoE are blameless.
April 13, 2024
Sir John: Bernanke wasn’t appointed to produce a Report which YOU will agree with. He was appointed to produce a Report which suggests a few minor tweaks to the models, but basically said that everything the B of E did (and Sunak as Chancellor authorised) was justified “under the circumstances of the time.”
Meanwhile, it’s interesting that Graham Stuart’s resignation as Energy/Net Zero Minister has resulted in Andrew Mitchell being appointed Dep.Foreign Secretary. Mitchell was Lord Dave of Greenshill Lobbying’s Minister for spraying British Taxpayer’s money around the world as Foreign Aid. He’s also best known for verbally abusing a Downing St policeman (and more recently for orchestrating a walk-out of the Chamber when Andrew Bridgen got up to speak about excess deaths and adverse effects of the jabs).
Increasingly looks like it’s Lord Dave actually running the Government, not Sunak. Perhaps Nadine Dorries was right and he’s being lined up as Interim Leader to get through the GE.
April 13, 2024
Since there are no changes at the BoE it is quite clear that The Treasury and Parliament is quite happy with the performance of the BoE which provides them with the outcome necessary for them to pursue their main twin policies of mass immigration and Net Zero.
This is unsurprising as all existing Parliamentary parties and the Civil Service are governed by Robert Conquestâs 2nd and 3rd laws of politics :
– âAny organization not explicitly right-wing sooner or later becomes left-wing.â
– âThe simplest way to explain the behaviour of any bureaucratic organization is to assume that it led by a cabal of its enemies.â
Weâre on the path to impoverishment and autocracy.
April 13, 2024
It was a whitewash. The report had to identify errors because there evidently had been lots but could not recommend wholesale changes because of vested interests
April 13, 2024
Who will take the Bernanke report seriously and instigate change ?. The BoE has made many errors of judgement all of which have cost the public dear ; those responsible still exist in their positions and the public – apart from complaining , can do nothing . Sunak could and should remove the BoE and other non -elected bodies from his economic decision process and turn to the likes of Sir John for guidance ; we have all had enough of poor judgement from 10 Downing Street and our respectful place in the world restored .
April 13, 2024
Abolishing IR35 will be one of the biggest benefits to the economy. This Labour Party policy – inflicted on the self employed by this government took away 46% overnight from the self employed – these people are now paying more tax than they would pay if they were employed. This policy was inflicted during a cost of living crisis when there was rampant inflation. Once this policy is utterly abolished things may start to improve. I am a Conservative Party member and have never been so badly affected by any government during my 40 year career.
April 14, 2024
Ian
The story of IR35 is a very long one and goes as far back as the 1970’s and the BBC would you believe. The solution to the ‘problem’ as HMRC see it, is IR35 but in truth the simplest thing to do was ask what was motivating employers taking on contract workers ? It was Employers NIC. To me they should have gotten rid of that tax. The money would have been still in the system and could have been taxed on company profits, VAT and used for investment and growth giving even greater tax revenues. But Labour were conned by the HMRC into believing that there were huge tax gains to be made. In truth, they shot the nation in the foot because they did not understand the problem and they were ideologically driven.
April 13, 2024
Ben. S. Bernanke the man who oversaw the last debacle, said, he never saw it coming.
April 13, 2024
Isn’t this the way all of these official investigations go — Someone is selected to lead who is a friend, or in sympathy, with those being reviewed,
It’s a scam HMG have been using for some years, and totally transparent. The real issues are not reported on, and where we might expect heads to roll, the final report does a whitewash job to tell us that all is perfectly OK.
Would our host do us all a great service by sponsoring a Bill to have the option of “NONE OF THE ABOVE” added to voting cards. In the event that over 40% voted this new option, that election in that area would have to be repeated with fresh names. Well past time we we saw new blood in Parliament.
Would new blood help the above situation? – only if they were true and honest!
April 13, 2024
Completely off topic for which I apologise
No mention in the media about a massive missile attack on Israel last night and that the Iranians might be about to launch an invasion
Anyone else get the impression that weâre being manipulated?
April 13, 2024
+1
April 13, 2024
not an impression – a fact.
April 13, 2024
Until Andrew Bailey goes, the BOE will never change. What an arrogant reaction to the report, we don’t do hindsight.
The MPC is guilty of groupthink because they all come from the same background.
But where are our PM and Chancellor in all this?
April 13, 2024
âThe Bank has a lot of intelligent well qualified people. They need to correct their errors and change their thinking.â
Do not forget that since PM Mayâs net zero by 2050 enacted without a vote or costing and PM âBoreasâ Johnsonâs Net Zero Strategy the BoEâs principle objective is to deliver Net Zero. This means de-industrialisation and impoverishment to reduce our 1% contribution to global CO2 emissions.
April 13, 2024
Degrowth seems to be the government’s aim taking into account: net zero, nearly-open borders, increasing share of GDP and the ‘equity’ aspect of DEI, the neo-Marxist attempt to create equality of outcome. ‘Highly paid’ is code for increasing salaries and inviting leftist economists to enjoy a sinecure.
April 13, 2024
*increasing government share of GDP
April 13, 2024
âThe models need improving, but they have the people to do that.â
Why is it that whilst many people believe that the BoEâs models are faulty those of the IPCC are taken to be accurate even though their predictions of global temperature are not matching the observed data and Happer & Wijngaarden have shown that additional CO2 causes negligible additional warming because all the IR radiation emitted from the planet in the CO2 frequency bands is already absorbed (and subsequently re-emitted) by the current amount of CO2 in the atmosphere, a condition described as IR saturation. Especially when in addition, the IPCC WG1 (âthe scienceâ) report cannot find any climate change beyond natural variation for all weather types other some slight warming and the additional CO2 is greening the planet to produce greater crop yields.
April 13, 2024
Bernanke made fifteen separate recommendations – i.e. he found fifteen separate faulty areas of incompetent judgement or poor management of staff and outdate information systems, some quite staggering – which need urgent remedy.
No CEO in private industry would survive such a criticism. Nor should Bailey.
April 13, 2024
I see Sunak thought it a good idea to appoint Justin Tomlinson as the new energy minister. I’m sure he’s a nice chap, but I can find no trace of his prior engagement with energy issues. This at a truly crucial time in the development of energy policy, with many wrong decisions being lined up by the energy quangos for approval. He lacks the skills to keep the lights on, and I guess it will be a race between the time of he election and resignation in ignominious failure.
April 14, 2024
He has probably turned lights on and off, and drives an EV….nuff said.
April 14, 2024
Perhaps start by asking how Bernanke is qualified for this role, since a lot of the 2008 crash can be laid at his door – or at least, it happened on his watch.