The employment figures last month were good again showing many more full time jobs still being created. The ueconomy however has been slowed by the monetary and fiscal squeeze. Vacancies fell and wage growth reduced as the slowdown starts to reach the jobs market.
The Bank of England has cut itself off from the trends amongst all the main Central banks in the world, who are fighting slowdown and recession by loosening policy. They are cutting rates, pumping liquidity into markets or buying bonds to give things a boost.
The Bank of England instead announces all UK banks meet their stress tests and would survive a deep recession, yet it goes on to demand they increase their capital buffers. This means less lending, less promotion of growth, less support for new investment or for consumers to buy homes and cars.
It’s the opposite of what we need, more money taken out of productive use when our banks are fine anyway. The 1% lift in the countercyclical capital buffers may freeze as much money out of the economy as the budget proposals in the Manifesto might put in.
Higher sterling is also a monetary tightening. This economy needs some combination of fiscal and monetary stimulus to get back to a decent growth rate.
December 18, 2019
Good Morning,
Sir John, forget the BoE, shaving 25 bp off inter-bank won’t make any difference, get into the real world of personal loans, mortgages and commercial lending and look at those rates. You say you want to help people and businesses; this is where they borrow, get the banks to do their jobs better.
December 18, 2019
Indeed the bank are getting away with massive margins and fees, where is the competition authority, where is some real competition?
December 18, 2019
Just heard Christopher Woolard of FCA on radio 4. It seems the one completely rip off personal overdraft rates (40% or even nearly 80%) for all is indeed being driven by the (people ed) employed at the FCA.
Why on earth should good customers pay the same rate of high risk ones? Anymore than they should have too in insurance. This is not fair competition it is another tax on the prudent and a subsidy to the imprudent it is damaging market rigging. It also forces people to take loans when an overdraft might be far more suitable & sensible were it available at fair rates.
What is the government going to do to sort out the bonkers, misguided loons at the FCA? It seems Mr C Woodard is ex BBC so perhaps this partly explains this lefty lunacy.
December 18, 2019
Stop the government rigging markets – be it in energy, housing, banking, education or health care. Freedom and choice and get the suffocating government out of it. They always do far more harm than good.
December 18, 2019
Transport is also rigged massively for no good reason too – this is hugely damaging to the economy as are all the above market distortions.
December 18, 2019
People cannot borrow easily if their employment has been casualised.
The pillars of hitherto Tory doctrine are contradictory.
People need proper, secure jobs.
The trouble is, if people have employment worth protecting, then they tend, understandably, to vote Labour to do that.
December 18, 2019
For goodness sake Martin, we have more in work than ever before, we have just had an election, and Labour got hammered.
Are you suggesting the millions who are in work and who did not vote labour, all have jobs not worth protecting.
Please be sensible, aware that many are perhaps working in Jobs they perhaps would prefer not to do out of choice, but it is a job which earns you a living whilst you continue to look for something better.
December 18, 2019
@Martin in Cardiff
Have you considered emigrating?
The climate in Venezuela might suit you better than Britain’s.
December 18, 2019
Not enough of them did vote Labour it appears.
We have the lowest number out of work for decades and the highest number in work for decades.
Yet all you can do is to carp about a very small number of people out of the whole job market who are on part time or temporary contracts.
It suits many to do these jobs and businesses need extra staff for short periods at times of seasonal peak demand.
Not every job can be a full time job for life.
December 18, 2019
“The trouble is, if people have employment worth protecting, then they tend, understandably, to vote Labour to do that”
Apparently not !
December 18, 2019
Indeed the banks are still very restrictive on terms, expensive, inflexible and rather slow too it is hugely damaging to the economy. How can it be right that they are able to get away with interest rates of 40% or even nearly 80% on personal overdrafts (driven it seems by the regulators in this) when they pay less than 0.5% on deposits? This rate charged even to solid as a rock customers! Set them free from red tape and get some real competition in the market and encourage more sensible lending by them.
Interesting to see the voting breakdown by age, gender and education in the Times yesterday. Women, the young and those with most education all rather more likely to vote Labour.
Particularly education where it is very stark:-
Just GCSEs or less – Conservative 58% to 25% Labour
Medium education level Conservative 48% to 31% Labour
Degree level education Conservative 29% to 42% Labour
Perhaps they just resent having Ā£50K+ of debt and 3+ year loss of earning for, very often, totally worthless degrees? Educated into lefty stupidity it seems (like nearly all the dopey art grads on the BBC) perhaps something is wrong with our syllabuses and our generally rather left wing teachers and lecturers?
Doubtless the formally āeducatedā are far more likely to have been educated so as to fall for the Climate Alarmism CO2 āpollutionā religion and magic money tree economics. Though not the sensible scientists I tend to find, (unless they are seeking research grants of course).
āSome ideas are so stupid that only intellectuals believe them.ā ā George Orwell
December 18, 2019
Perhaps why Blair wanted āeducation, education, educationā as it seems it is in effect left wing indoctrination in many cases.
Perhaps, for Boris to win the next election, he needs to get far more people to leave school at say 15 and get a job and start to pay taxes! Let them get education at night school. Perhaps on building sites so they can build the homes needed.
Certainly well over 50% of the degrees people do are almost totally worthless and they, or the taxpayersl are paying Ā£50K + for them plus interest of say Ā£3k PA for many years after that!
December 18, 2019
I heard student loans get written off after 25 years !!!
So all the people with crap degrees, just avoid real work or go abroad.
Why is the tax payer on the hook ?
A better idea would be that the universitys are on the hook for the loans, then that way, they might actually do degrees that are worth something.
December 18, 2019
That is doctrine, doctrine, doctrine – for you. The Political Class at times measure all people by themselves and themselves alone. Forgetting everyone one of us is different and has a different perspective and ability to contribute – which as a whole we can be brilliant.
Education gets confused, does being academically clever make you ‘very bright’? A bit like why is ‘common’ sense so ‘rare’.
December 18, 2019
Intelligence has many forms often people say seven:-
Linguistic Intelligence. …
Logic Intelligence. …
Kinaesthetic Intelligence. …
Spatial Intelligence. …
Musical Intelligence.
Interpersonal Intelligence. …
Intrapersonal Intelligence.
I am hopeless at foreign languages and remembering peoples’s names etc. but reasonable at sports, maths, logic and OK at the others.
Education rarely makes people brighter I find but it can give them some skills. Many people with loads degrees just have rich parents who funded them as perpetual students rather than getting a job themselves.
December 18, 2019
I, along I suspect, with most other people do not understand high finance, but a simple, maybe stupid question occurs to me – if the banks, are as you say ‘fine anyway’, why would the big money people who lend to government, lend at long term virtually negative rates of interest rather than leaving it in the banks?
December 18, 2019
Sorry LL, my post seems to have got into your post in error.
Whilst I am here though, I would suggest you already know the reason for putting up school leaving age is nothing to do with education, education, education. It was I suggest a short term (do politicians ever do anything other than short term?) ruse to massage the unemployment figures for the young as well as overall at a time when jobs were not being created.
December 18, 2019
Indeed for about 50% the leaving age is now 21 after you worthless degree. But leaving with Ā£50K of debt.
December 18, 2019
Exactement!
December 18, 2019
+1 – the left wing bias among lecturers and professors is well documented. It is indoctrination, and students appear to be the most ignorant and foul mouthed of protesters these days.
December 18, 2019
It would be interesting to see those figures broken down by occupation. I suspect that the young, women and “highly educated” Labour voters are by and large glued to the state sector. All the more important for the government to spend the next 5 years placing influential souls into the public sector, to root out skewed thinking.
December 18, 2019
This should be a priority.
My daughter is currently at uni and she reported that students were in tears after the exit polls were announced last week. The Reverend Moon would be impressed at the level of indoctrination in UK schools.
December 18, 2019
Indeed especially as the state is now so hugely bloated.and with such little real output of value.
December 18, 2019
Tony Blairs Government politicised all recruitment and selection processes in public services, Councils, civil serpents, health managers etc and we’ve had 20 years plus of left wing managers and supervisors. Its time this is addressed as well as political correctness. We need to return to a meritocracy not woke quotas!
December 18, 2019
If said “educated” people then go on to set up a company, and employ people, they will very soon discover employment law is their enemy, and change their minds on left-wing ideology.
December 18, 2019
Indeed it does not even help workers either really. This as it depresses wages for the good workers and make them carry bad ones!
December 18, 2019
It’s not easy to deal with under performing staff, while the govt continue to award them pay increases at the employers cost. A socialist idea that the Tories seem to have adopted with glee. It allows them to promise people a pay rise and simultaneously award the govt an increased tax take.
At the very least the personal tax free allowance should be pegged to the minimum wage to limit this fiscal trickery.
December 18, 2019
Degrees mean nothing. The most intelligent person I ever met (off the scale brainy) left school at 16 with two GCSEs. I am one of 5 brothers. We all have high IQs and a top grammar school education. We all left school at 16 because it was expensive to āstay on at schoolā. We were expected to leave school and start work. I have had many people with degrees work for me over the years who I would not trust to tie my shoelaces.
December 18, 2019
Much truth it that. It would be good if more people were motivated to earn money and go in to business. Why not give the good ones a Ā£50K soft loans for their business – rather than Ā£50 for a worthless degree in media studies at ex-Bognor Poly?
Some of the higher “wranglers” in maths at Cambridge were very, very clever indeed and not just in maths. But they were clever before they went. Some not very worldly wise though.
December 18, 2019
I quite agree and am infuriated by job advertisements that say ‘degree essential’. Do they know what ‘essential’ actually means. After some 40 years in business The only jobs I’ve come across are technical and which require a second degree or other post-graduate qualification.
Some businesses must miss recruiting brilliant people by excluding them from applying without a first degree. Many of the best salespeople I have known have never been near a university.
December 18, 2019
You illustrate Dominic Cummings’ malevolent genius perfectly.
When a group are frightened, powerless, insecure, isolated and poor, as millions in the post-industrial areas are, then the primitive instinct for whatever security can be felt kicks in large. That is, for togetherness and for shared identity, for tribal affirmation with their peers. In turn that engenders immense pressure to conform, to whatever a person believes, maybe wrongly, that their group mentality might be.
So if you can convince these atomised, isolated individuals that their identity group are going to vote Leave, or Tory, then you’ve cracked it.
That is where the micro-targeted Facebook ads and the press campaigns come in.
That is the main story of this country and of others at the moment. The fact of the Tory win is a relatively banal, predictable consequence.
As the late Tony Benn, used to say, “that’s what they don’t tell you on the BBC” though.
December 18, 2019
On most topics you can assume the BBC is 180 degrees out. and certainly on economics, the EU, energy, the NHS, transport, red tape and climate change.
December 18, 2019
Still in denial I see Martin.
You carry on denigrating the voters.
The voters plainly didn’t like Corbyn and his Marxist pals.
December 19, 2019
I’m not denying that at all.
I’m explaining why they say that they didn’t like those things.
December 19, 2019
When you refer to voters who voted Conservative in the recent election as “frightened poor isolated insecure powerless” and then go on to claim they voted because they were influenced by peer pressure then you are in denial of the reasons millions of people deserted the Labour party and like many on the left you obviously feel voters who have a different view to you are not intelligent.
December 18, 2019
Marty
Dont talk absolute b*******s
Cummins skill is in analytics, you know he finds out what people want and tries to deliver against it.
You marxists make stuff up about poverty , disenfranchised and MILLIONS living in fear and then are gobsmacked when none of them vote for you. Er thats because THEY DONT EXIST they are a figment of your imagination.
This country has experienced the biggest DECLINE in poverty, bad health, crime and mortality in the last decade than in the rest of recorded history .
You and your marxist friends STILL haven’t learned the basics. Working people are perfectly capable of thinking for themselves, they are perfectly rational , they know what they want and they voted in a landslide to get it. You and your dreary mates on the other hand are still totally clueless
Marxism is a failed 19th century philosophy . Here in the digital age people are fed up with people like you trying to manipulate them with your free this and that , they realise nothings free and it has to be paid for in taxes. The reason families struggle is because the cost of living is high, mainly due to the cost of government
December 18, 2019
You need to belt up. You have lost the argument. People didnāt like Corbynās ludicrous magic money tree policies, his attempts to whip up class hatred nor did they buy his silly lies about the NHS. Labourās vote was probably held up by people voting Labour because they thought it the best way of stopping Brexit. Without Brexit labour would have got a lower not a higher vote, contrary to what they are now trying to convince themselves.
December 18, 2019
I’m relaxed about banks penalising customers who take money that isn’t theirs, without prior permission. And if you want more than 0.5% on deposits – at a time when mortgage rates are very, very low – then either buy some premium bonds or put some money into the stock market.
December 18, 2019
My point is that the margin of 80,000% or even 160,000% betwen deposit and ODs is rather high and shows a total lack of real competition. It is not just unauthoried overdrafts but all of them!
December 18, 2019
LL you are correct. The banks will not improve their services to the public and the value will not improve without competition. And that goes for the NHS ass well,
As for voting breakdown, does that not prove conclusively that indoctrination works?
December 18, 2019
āSome ideas are so stupid that only intellectuals believe them.ā ā George Orwell
==
Einstein said something similar about quantum physics, thereby demonstrating the fallibility of inductive reasoning.
It also means that you can do the same thing, and yet get different results, and so defeating another of his saws.
December 18, 2019
Under 25ās had almost 3 Labour votes for every Conservative vote. Over 65ās over 3 conservative votes for every Labour one.
Clearly we need the voting age to go up to about 35. Or perhaps people should only vote after they have had a job and paid some income tax and NI tax for say 5 years? After all they are voting for how this tax is spent or wasted.
December 18, 2019
Actually we need policies that reflect the needs and views of the younger generation not some crass view that somehow they do not deserve to vote. My under 30 nephews family has a far more empathetic view of life than obviously you do and I think the world is better for it.
December 18, 2019
I do not condemn them all these youngsters they are average figures. But until you start paying tax it is all too easy to think money grows on some government tree as Corbyn seemed to.
December 19, 2019
You are a good advert for voting age to be risen to 40 years old
December 18, 2019
It should be the other way around. Maximum voting age of 75 – perhaps even lower. Most pensioners donāt contribute. You donāt have jobs. You rely on handouts funded by us. You skew policy imposing monstrosities like Brexit. You fail to tackle pressing concerns like climate change and a housing shortage because you object to change. As a bloc you have been able to repeatedly fleece the system at the expense of younger people. Most of my tax is wasted on you lot. Iād really like to cut you all off and let you experience the austerity you have imposed on others for decade. And if they means that some of you lose your homes then tough. We have to live within our means.
December 18, 2019
Andy – -I really don’t understand why you continue to live here, and pay taxes you resent. You suggest life is so much better and fairer elsewhere, all that suggests you should relocate to any of those much more enlightened countries than ours.
December 18, 2019
Your misunderstanding of economics knows no bounds.
You may know the cost of something and everything –
But the value of nothing.
The older generation give you an insight what is coming to you.
My generation had to work
So enjoy your Christmas and not be bitter.
“Oh be joyful” was a memorable pub I noticed in my youth.
Wise advice, better than any education.
December 18, 2019
“You rely on handouts funded by us. ”
You will get there one day. However, I don’t rely on handouts, I have worked hard all my life, run my own business, survived great financial difficulties, never went running to anyone. You have a very arrogant and distorted view of the older generation. Life experiences bring knowledge and judgement when viewing politics and politicians over many years.
Climate change is a scam, it is perpetuated by the UN in their quest for Global Governance and the re-distribution of wealth in their envisioned Socialist Utopia. The idea that CO2 is a thermostat for the planet is totally ludicrous and anyone looking into the whole issue seriously, soon comes to that conclusion. There is mega money in the proposals for turning the economy upside down and imposing highly expensive and unreliable energy on the country.
The Bank of England under Mark Carney has pursued a “green” agenda and he is due to join the UN when he finishes at the BoE in a couple of months, unless they keep him on for yet another extension.
https://www.cityam.com/mark-carney-appointed-un-climate-envoy-ahead-of-bank-of-england-exit/
December 18, 2019
I see that you are indoctrinated by the Climate Change Scam. Perhaps you should grow up as we had to in our youth and start to think for yourself.
December 18, 2019
Letās hope Labour pick up your ideas and language on this in time for the next election.
December 18, 2019
Andy
“Most pensioners donāt contribute”
Because they’ve more than paid their way already.
“You donāt have jobs.”
Excuse me……I do, and I’m a pensioner.
“You rely on handouts funded by us”
Firstly I doubt you fund anything. In fact with your attitude I’d be surprised if you were employed at all. Secondly I don’t receive a single handout from anyone. I pay my own way in this life.
December 18, 2019
More worryingly for the future, Labour took the majority of votes from people whose views were not already entrenched.
Those who made their decision on the day or during the campaign were more likely to listen to Labour and vote for them.
It may be a vote for change rather than more of the same but if the Conservative campaign message does not resonate then a reasonably performing opposition stands a better chance next time out.
December 18, 2019
An analysis showed that in this election the tipping point age for Conservative voters to outnumber Labour voters was 39. In the 2017 election it was 47. So some progress.
December 18, 2019
Indeed the young seem to be getting wiser earlier!
December 18, 2019
If my memory serves me correctly that age (39) is very close to the average age of the first-time house-buyer.
December 18, 2019
The phoney anti-intellectualism of eminent, highly-educated Tories such as Michael “people have had enough of experts” Gove is a bit rich.
Johnson is a classicist, with a grasp of French, German, Italian, and Spanish too.
Their apparent claims to share the self-destructive cynicism of the ignorant towards education are hard to believe, therefore.
Reply We are not anti intellectualism and favour good education for the many. We are against experts who get it wrong and are arrogant with their false forecasts
December 18, 2019
He did not say people have had enough of experts he said:-
āhad enough of experts from organisations with acronyms saying that they know what is best and getting it consistently wrongā
Like all the ERM & EURO enthusiasts!
December 18, 2019
And all the climate alarmist “experts”.
December 18, 2019
Thank you John.
Well, in that case I think that you should do more to counter the claims made on your behalf in “the popular press” that your party is, in order to chime in with the narrative amongst the ignorant, whose votes you nonetheless want..
I know that you are not anti-intellectual at all, which is why I used a qualifying word in my post.
December 18, 2019
A typical silly leftist misquote. Gove said people have had enough of experts who have so often been proven wrong in the past. No wonder you lost, people can see through this sort of distortion.
December 19, 2019
Many people don’t hear the dependent clause if it suits their ignorant prejudices, and Gove knew this.
December 19, 2019
Interesting logic there Martin.
The left misrepresent a quote leaving out the important part and when exposed they then claim it is the way he would have wanted it to be published.
Straight out of Orwell’s ministry of truth
December 18, 2019
So if you are unlucky enough to be unable to work – for health reasons – you lose your vote.
If you are long term unemployed because there is a recession on, you lose your vote.
Sounds wonderful.
December 18, 2019
Reasons are clear-indoctrination, perceived free-stuff and student debt.
December 18, 2019
What about a country where only the great and good Lifelogic is entitled to vote?
December 20, 2019
Good idea.
December 18, 2019
We need to:
(a) Ban universities from making unconditional offers.
(b) Restrict loans to students wanting to take a poor degree at a poor university.
(c) Preserve free speech on campuses.
(d) Increase the number of places on STEM courses and lower the number of places on Arts courses. (It’s difficult to work Cultural Marxism into a Maths course.)
(e) Stop the moves to make a degree necessary for a whole raft of jobs. The idea that coppers should need a degree was lunacy of the first order from the May government.
(f) Encourage students to attend local universities.
December 18, 2019
Indeed
(Itās difficult to work Cultural Marxism into a Maths course.) I am sure they could manage it though!
No one with less than say AAB at A level should be going that would cut out about 75% of them.
December 18, 2019
(e) should be shouted from the rooftops
maybe we should insist on degree pay gap statistics to be published by every company to overcome inequality.
December 18, 2019
“(e) Stop the moves to make a degree necessary for a whole raft of jobs. The idea that coppers should need a degree was lunacy of the first order from the May government.”
I completely agree. For many roles now that say they require a degree, it doesn’t even have to be a related degree, so it isn’t a case of the degree providing necessary skills.
December 18, 2019
The reason that people switch to conservatism as they get older is that with age comes experience. The time taken to come to their senses could be shorter if schools were to teach history, basic numeracy and critical thinking.
December 18, 2019
I would challenge a Conservative government to tackle educationists head on to stop teaching children what to think instead of teaching them how to think.
December 18, 2019
Good morning.
May I suggest that the government reduce spending and lower personal and corporation taxes ? This would be a good means of stimulating spending, investment and growth.
Politicians are quick to blame others (ahem, Labour) when things go wrong but, are quick to claim the credit when things go right. I would ask that are kind host focus on what the Chancellor and the First Lord of the Treasury plan to do to stimulate the economy.
December 18, 2019
How have we got into a situation where people controling the Bank of England are deliberately trying to screw us over ?
This is as bad as putting “Climate Change” in the name of the department in charge of Energy !!!
We now know putting the word “Climate” in front of the word science, is like putting “Witch” in front of the word doctor.
Can you please start closing down these govenment departments.
If you need help in identifying other govenment departments that need to be abolished, I am available.
December 18, 2019
The BoE wants to create a recession so they can blame Brexit.
Why is Carney still here.
December 18, 2019
He will be succeeded by a clone,albeit probably of a different gender.
December 18, 2019
You need not blame Carney.
Sterling has just fallen to below pre-election levels, on the news from the European Union’s Parliament – you know that so-called “rubber stamping agency” – that it may very well NOT rubber stamp Johnson’s Withdrawal Agreement unless, quite rightly, the hitherto appalling treatment of our fellow Europeans here is properly addressed.
December 19, 2019
As usual you are wrong Martin.
It is the EU that has refused to confirm the status of UK citizens living in Europe.
December 19, 2019
Citizen status is not an EU competence, member states individually decide citizen status. Wrong again edward2.
December 19, 2019
Strange that hefner
It is part of EU treaty law being one of the 4 freedoms and is being discussed by the EU Commission during brexit talks.
The MEPs have to agree the Commission’s proposals but that is more of a formality.
So with your usual bluster you are uninformed yet again.
December 19, 2019
Thanks acorn.
If I corrected all of his inaccuracies then I’d have no time for anything else.
December 20, 2019
Martin
The UK Government under Teresa May said that EU citizens living and working here would not have their rights to continue altered.
The EU have not yet confirmed that same assurance for UK citizens living and working in the EU.
Freedom of movement is one of the four freedoms that member states have to agree to accept.
December 18, 2019
It’s a Remainer scotched earth policy. Sack him.
December 18, 2019
Could this possibly be a deliberate squeeze on the economy just to say “we told you so” with regards to brexit?
December 18, 2019
Your ideas are mere fiddling.
It is the one thing that marked Thatcher from every other politician to date was her innate understanding of the wealth creation process. She understood that this process is a human process not a political one. It is the innate intelligence, ingenuity and creativity of each person that incites and creates the material prosperity we all enjoy to make life a more convenient and enjoyable experience
Therefore intervening in the money markets to influence short term rates are upping money flows is meaningless in the greater scheme of things. It isn’t real.
Cut income and corporation tax on business. Impose reform on Labour’s client state. Inspire entrepreneurial ingenuity. Unfortunately this PM appears overly concerned with the feelings and sensitivities of our pampered, sugar coated public sector rather than the real world of the private sector economy
When a Thatcherite Tory MP is calling for more State spending knowing full well that a good percentage of it literally wasted does not bode well.
The private sector will once again be told it must absorb the cost of easy politics (more political spending) over hard politics (State reform)
Reply See reply above. I want tax cuts and other reforms as well as a sensible monetary policy. We worked hard on money policy under Thatcher and ahs to see off the attempts by the Treasury to peg us to the DM which would have tightened money too much.
December 18, 2019
Reply to reply
Sterling over the past four years has been shadowing the Euro almost on a 1 vs 1 basis. Perhaps that might explain the BoE’s moves ? If so, then there has to be a political dimension to this, the BoE would not act otherwise.
December 18, 2019
Moving on to Plan B #rejoin means making Brexit a failure.
The treasury and civil service are now fighting a rearguard action.
If there is no socialist government then Plan B is guerella government.
December 18, 2019
Javelin
“If there is no socialist government then Plan B is guerella government.”
Led by Andy.
But seriously, a guerrilla government is what we’ve just had with the previous parliament.
The swamp needs draining, not just the HoC, but the civil service, Schools, Universities…left – ism needs witch hunting out of existence.
December 18, 2019
It is reassuring that the B of E could stand a deep recession. Book keepers and accountants are very happy when they know that they have avoided loss,liquidity and bankruptcy. Perhaps our systems need a re think. I don’t want to be a Christmas scrooge, but perhaps we need to lay back until the new year and Brexit and reassess the situation .
We still need skills . The problem is that those with degrees at an early age solely tells us that is just what they can do ; nothing else. If a teenager studies well and continues at university they are doing it in an enclosed culture without distractions. This can not safely been transferred and an assumption made that good school marks equip this person for life long accreditation in what ever job they choose . I have witnessed many times those with a ‘said’ good degree not having the ability to apply this cultural learning to anything in life . I suppose we need to look at what intelligence and application really is.
December 18, 2019
Yet more climate alarmist nonsense from Roger Harabin (English St Catharines) and the BBC and the bonkers Committee on Climate Change today. The BBC is at it nearly every day they are totally deluded and wrong.
When is this absurd committee (and the climate change act) going to be abolished/revoked?
Why indeed are people on such committees allowed to have rather clear conflicts of interests (so long as they declare them). They surely remain damaging conflicts of interests declared or not? This climate alarmist lunacy is clearly driven entirely by vested interests after tax payers money and law changes to advantage their vested interests.
December 18, 2019
Complete drivel from Lord Debden (Gummer) on radio 4 just now. Surely we have had enough of this man.
December 18, 2019
I think I have had enough of you.
December 18, 2019
At the international level I hear China and Russia have not agreed on Climate Change issues put forward by European Committees of academics and politicians. But no details forthcoming of why. Costs? Theories as to the authenticity of Climate Change nonsense? We don’t know.
My guess is that China has been looking at its own records going back thousands of years. It will have taken time to gather and analyse them, that many.
December 18, 2019
@Lifelogic
The BBC have created their own group think bubble were climate alarmism cannot be questioned. The Climate Alarmist Conference in Madrid actually barred 18 year old Naomi Seibt (a climate realist) from attending. She is analytical in her approach to climate issues, which is a refreshing change from Greta’s hysterics. Needless to say, the BBC will be completely ignoring her very existence, they wouldn’t want impressionable kids to get the “wrong” idea.
December 18, 2019
Yes the scenarios they are planning for seem excessively over cautious. A first test of this governments resolve, or even Boris v the Treasury and its direction of travel is to employ a more enlightened less risk averse Governor.
December 18, 2019
We now live in a World of bias, biased views and opinion. Anything can be attributed to any form of research – the result always tend to be in tune with the paymaster.
The markets as in money and stocks like everything else only exist while there is a trade being made. It should be without surprise that the markets move as a result of rumor’s not facts. As without movement there is no reason for money to change hands, meaning that there would then be nothing to pay the wages.
While Governments can dictate fiscal policy they always forget that is interference and interference distorts. Each distortion then needs more interference, leading to different distortion and so-on and so-on.
Light touch government produces the greatest prosperity. All government should be involved in is the stamping on fraud and manipulation. Those elements are equal to theft
December 18, 2019
The economy is slowing down due to Brexit; simples .We have a highly stimulative monetary profile already as action had to be taken to avert the referendum recession . No-one else had the problem and so the comparisons made are utterly and entirely misleading details in the overall picture.
What we must all focus on the amount of debt Brexit has caused the actions taken post referendum already have us in uncharted waters and the IFS have warned that promises made pre-election will take us well into the 90s (% /GDP)
Quite what this banana republic populist spending spree has t0 do with conservatism escapes me
Reply You are wrong on every count. The UK has the tightest money policy of all the major Central Banks. Please be more international in your outlook, as much of what goes on in our economy is influenced by the Fed and the Peoples Bank of China
December 18, 2019
Uk rate 0.75%
Fed 1.75 % plus
PBOC’ 4.35%
I would be interested to know what rate you think would be prudent at this time ? It seems to me you are so fearful of the Brexit recession you would like to get the retaliation in first with renewed QE , I would imagine this is so it would be less obvious why the UK had to take such desperate measures
I have already read frequent claims that QE can simply be written off mirroring the same voodoo magic one finds on the hard left and all in all your evident terror at the reality of Brexit does little for my nerves
Reply The Fed has injected $150bn in the last month!
December 18, 2019
Newmania – you seem to be well adrift in your thinking. Less than 10% of UK GDP, that’s manufacturing and services combined, has anything to do with Europe or its market.
While I agree the indecision of a miss-guided Parliament has caused great damage to the UK economy. It was the decision to fight the wishes of the people , and delay, and delay again that damaged the economy. Not forgetting the contrivance of Hamond. The act of leaving has nothing to do with any slowdown or debt.
December 18, 2019
“The economy is slowing down due to Brexit; simples .”
Then explain why the slowing down started in 2014:
http://johnredwoodsdiary.com/2019/11/06/its-the-economy/#comment-1069102
December 19, 2019
Speaking at the City of London headquarters of Bloomberg on Wednesday [Wed 23 Jan 2013 10.59 GMT], David Cameron promises an in-out referendum on the UK’s membership of the EU by the end of 2017. The prime minister says if he wins the 2015 general election he will demand the repatriation of a series of powers to Britain and then hold a vote. (ITN) The Pound was at $1.60 at the time.
The economy actually started turning down from the middle of 2014 when reality hit.
December 18, 2019
Net debt is about 65% of gdp
December 19, 2019
Only if you think we can print money without cost in which case debt is zero. I would disabuse yourself of the idea that John Redwood actually believes all the stuff he writes. He certainly doesn’t believe that rubbish
December 18, 2019
Newmania
“The economy is slowing down due to Brexit”
And of course nothing at all to do with world events, the US / China. Wow, you’re so informed NM.
December 19, 2019
Yeah its slowing down despite Brexit . Why not let me write your excuses for you ,I could do a better job of it …seriously
December 18, 2019
The Bank is right to do what it can to protect us from your Brexit. Brexit will not largely affect the Tory posh boys who are imposing it on us. But everyone else will suffer.
December 18, 2019
It is what we voted for; that is how a democracy works; provided of course that government respects it.
December 18, 2019
Andy
You keep saying ‘your’ brexit, on and on and on, like a stuck record.
Does it mean that you personally will not recognise that we have left the EU ? I rather hope so, because it’s about time we had some real entertainment of the telly, we could see you waving your little placard, and hear your little voice. We could say; “Oh look, there’s that little remainer man again”
“Brexit will not largely affect the Tory posh boys who are imposing it on us”
Well now, I admit I do have the distinction of imposing it on you because I voted for it, though I can assure you I am not posh.
“But everyone else will suffer.”
You mean ‘you’ since you clearly don’t care about anyone except yourself.
December 18, 2019
There are people in this world who find it impossible to ever admit that they might have got something slightly out of line or completely wrong.
The current restraint from the B o E has all the hall marks of a departing governor who has spent nearly 4 years forecasting doom and gloom should we ever think of leaving the EU.
Thanks to the previous chancellor we have had this governor for an extra year which we did not need, and now must to replace urgently so that this current restraint can eased. Banks need to lend and businesses need to borrow if we are ride this world slow down.
December 18, 2019
Btw – Its amazing don`t you think , how much Corbyn has got his way . In the past the sort of arrogant profligacy contemplated by the Brexit State would have been regarded as lunacy.
Now, when the choice is between dumb and dumber; irresponsible promises can be made all day long because no-one worried about debt would vote for magic grandad
Corbyn has won
December 18, 2019
If a small increase in State spending is “arrogant profligacy” and “lunacy” then what words would you use to describe the huge increases proposed in Labour’s manifesto.
December 18, 2019
šš you wish! Keep taking the pills, and a Merry Christmas!
December 18, 2019
Newmania
Hi how are the the Remainers are the large majority now posts coming along?
How is the city are all moving to Frankfurt & Paris working out for you?
Are you ever going to post something that is correct?
Happy Christmas x
December 19, 2019
Libertarian,
Getting everything correct does not seem to be in your power either.
Marry Christmas
December 18, 2019
New maniac – – Yes he has ‘won’ . He never wanted nor had the ability to govern. Many like him spend their days complaining, waving protest banners, trying to ridicule intelligent people, pretending to befriend horrible regimes and those with innocents’ blood on their hands. The king of the whingers can bike it off to his allotment, wearing his marxist cap and possibly a protest slogan tee-shirt. He has been spared being expected to actually do something to change events for the better.
Yes he has ‘won’ his freedom, but remaining an abject failure at everything. Good riddance.
December 18, 2019
Yup, thatās why we are pulling out of NATO, abolishing the nuclear deterrent, about to see confiscation of assets, capital and exchange controls, nationalisation of swathes of industry, punitive tax rates, unions on the board of all companies with a bloc of shares swiped of current owners, union officials in charge of media outlets, friendly gestures to terrorist organisations, identity politics and constant whipping up of politics of envy and Class war from ministers, an EU referendum with remain versus a parodic Brino. Yes Boris will be just like Corbyn as you say.
December 19, 2019
All fair comment Richard. No sane person could vote for Corbyn and that is exactly why there is no mandate fpr Brexit , the only subject on which he and Boris are agreed. My comments were clearly in the context of expanding debt .
It really in`t so very complicated
December 18, 2019
It sounds to me as if a repeat of 2008 is wanted with growth created by large increases in consumer debt ending in another banking crisis.
Havenāt you got any ideas on how to improve the economy without getting it by people taking on more debt?
What about government borrowing at these crazy interest rates and stimulating the economy with investment in infrastructure.
Why not borrow and invest in training? It would be great if anyone stuck in unskilled, low paid work could be paid to take intensive 6 month training to learn bricklaying, plumbing, kitchen fitting, roofing, software development, electrical maintenance etc.
Why not set up a task force and transform one left behind town in the North and use that as a model to get them all done?
With money so cheap to borrow – for the government- borrow and build the Swansea barrage – and then build more.
For heavenās same have a bit of ambition and come up with something bit more ambitious and original and SUSTAINABLE than ācut interest rates and get people to borrow to buy cars!
Reply I did not recommend a rate cut. I recommend not increasing the counter cyclical capital buffers, and a new round of facilities for commercial banks. We also need to look at what the Fed is doing at the short end of the curve. I also support a range of budget policies which I have talked about before. The point of this piece is to say the whole favourable impact of a stimulatory budget could be offset by the wrong monetary policy.
December 18, 2019
What you call a stimulatory budget risks getting the National debt up top 95% and beyond already with very little left the B of E can do
Quite aside form anything else many of the older people who voted for Brexit did not do so to impoverish their grandchildren. These levels of debt are an immoral generational theft no-one voted for is there no place for a sense of wider responsibility left ?
December 18, 2019
Interesting, Mike, and here’s a point of note.
The Chinese have a road and rail bridge over thirty miles long to a relatively insignificant island, yet there is not one of twenty-two miles length connecting the world’s sixth largest economy, the UK, to its second, the European Union.
It is not any insurmountable engineering problem preventing this. It is the doctrine, which says that it would have to be built for a guaranteed profit for and by the private sector only, and not by the country because it was wanted as a Good Thing.
There is far more which would fall into this category too.
December 19, 2019
Do some sums on the Swansea barrage, it is an insane project.
December 18, 2019
“The Bank of England has cut itself off from the trends amongst all the main Central banks in the world”
It’s in line with Canadian banks, as always.
December 18, 2019
Given stress tests principally are a means of persuading third parties that they can have confidence in banks of doubtful solvency, I am understanding of and grateful for the Bank’s apparent excess of caution in demanding increases in capital buffers even of banks meeting tests.
The Chancellor and not the Governor must provide stimulus now.
December 18, 2019
Question is – do we really need another consumer boom, sucking in imports and increasing immigration from our European “friends” at this time? Relax business lending, perhaps, but then there’s so much else wrong to fix first – business rates, NI rates, etc. We’re still feeling the effect of Ā£ devaluation from $1.45/EUR 1.30, causing our growth and employment rates to have remained high these past 3 years.
December 18, 2019
On an unrelated but timely topic, at tomorrow’s Queen’s Speech, the new Conservative Commons majority will take its place at the back of the room – a purely symbolic place that does not reflect the actual power relationship involved. The very next day, however, those same MPs are likely to approve Article 136(3)(d) of the Withdrawal Agreement, which, if I understand it correctly, provides that for meetings which could retrospectively affect contributions to the EU Budget for the years up to 2020, “the representatives…of the [UK],…may, upon invitation, exceptionally attend, without voting rights“. So, as of this Friday or soon after, the UK really will be “at the back of the room” – if it is allowed to be in the room at all – and that really will reflect the actual power relationship involved.
December 18, 2019
LL – – Young people who go through university are in the hands of the idealistic lefties who never held down a blue collar job in an area with poor or little investment. They are prey to the smart theories and mummo-jumbo brainwashing of the rebellious ‘brains’. Big city jobs are more allied to EU and global corporate activities.
The less formally educated face the stark realities of low incomes ( or benefits) in order to survive an often desparate no-win situation. Try raising a family and believe in a better future when prospects are so gloomy. It is these unfortunates who face the daily prospect of recession, unemployment and financial misery. They will be much more likely to vote for change the exit of EU offers.
December 18, 2019
Does the Governor know something we do not know?
December 18, 2019
No
December 18, 2019
Question should have been āDoes the Governor know something?ā
Answer still āNoā
December 18, 2019
What we need is an end to central banks since they are the root cause of many economic maladies we suffer.
December 18, 2019
Similar to what Trump has been tweeting about for the US
December 18, 2019
Who is in charge , the BOE or the Chancellor. I think this needs to be established PDQ.
December 18, 2019
I am all for being financially sensible and cautious, but you can be too cautious, and then miss an opportunity in many forms.
December 18, 2019
This is just a tantrum from the Governor of the BoE because it is now clear he won’t get his hard-core Remainer way with Brexit set to go through despite his ever gloomier and increasingly wild Brexit-bashing forecasts. Diddums!
December 18, 2019
Didnāt Brown free B of E from political/govt control?
Sold as some sort of belief in the āinfallibilityā of the markets ( that worked well!!!).
A big move away from democracy IMO. How can it be right to have bankers controlling interest rates? They are sooo relaxed about mega borrowing and putting the interests of big business first.
I want to be able to vote for the person who controls the money.
Put the Chancellor back to work!
Boris should reverse Brownās handiwork.
Or would the EU disapprove??
December 18, 2019
You have to replace him John.
Get rid of him. When he said he was increasing reserves so banks could lend after the financial crash it never made sense.
In Canada, reserve balances had been effectively zero for over a decade when Carney was there and bank lending continued as it does anywhere else. Canadaās inflation also had been similar to that of the U. S. at that time.
In Japan, under the so-called quantitative easing regime of 2001-2005, reserve balances reached around 15% of GDP, and the monetary base (reserve balances plus currency in circulation . . . often termed āhigh powered moneyā) reached 23% of GDP.
But Japan has, if anything, experienced deflation during and since this period, which is not surprising, sinceāagaināthe rising quantity of reserve balances did not enhance Japanese banksā abilities to create loans.
In the U. S., by comparison,during that time reserve balances had reached about 6% of GDP, with the monetary base rising from about 6% to about 12% of GDP since September 2008.
Those fearing rising Fed reserve balances apparently havenāt noticed that an increase in reserve balances about three times the size in terms of GDP already happened in Japan, with none of the effects that have been predicted for the U. S.
In short, donāt fear the rise in the BOE reserve balances. It is not inflationary because the money multiplier view, found in the textbooks, doesnāt apply to the flexible exchange rate monetary system of the U. K.
The U. K. may indeed experience rising inflation in the future (or it may not), but it wonāt have anything to do with the quantity of reserve balances banks are holding.
December 18, 2019
It is yet another example how as a country we are pretending to use the Euro.
Impose fixed exchange rate self imposed constraints on our monetary system
Get someone else in charge John that knows we are using the Ā£. With a flexible exchange rate.
December 18, 2019
Also wage rises have slowed; another indication of some tightening.
December 18, 2019
South Africa has Ā£267billion GDP
NHS has Ā£170 billion GDP (after Borisā increase)
Iām prepared to pay anything for Brexit; but we need a Tory Chancellor and a sentient BoE Governor ASAP. please Santa!
December 18, 2019
I cannot resist the inference from the action of the BoE is the present Governor’s way of getting his own back because his dire Brexit predictions were wrong.
He should return to Goldman Sachs where he came from and no longer interfere with our currency nor our daily lives .
December 18, 2019
As somebody that knows nothing about banking and the economy. I get the impression that the Bank of England and it’s Governor do their best to stop confidence in the UK rather than promote it. It is very much a “Remain” institution and likewise it’s Governor.
Time to return the Bank to the people as well. A BankEx is needed.
If the tax payer funds the private banks mistakes, then why are they not Nationalised.
What money will the tax payer get back if the Government invests in the Railways.
Nationalisation is OK as long as the tax payer picks up the profits and not just the losses or gets short changed when BT, Gas and Electricity are sold off to foreign investors and profits leave the country.
December 18, 2019
For a start we need rid of Carney from the BoE then the competence of the other board members should be reviewed along with their financial interests.
December 18, 2019
Off topic, JR, please will you and others stop talking about a “no deal Brexit” if you really mean only “no special trade deal with the EU, just defaulting to WTO terms”?
Because while supporters of Brexit continue to talk about “no deal” as if that means no deal at all on anything at all – which is now in any case obviously a complete nonsense, given that the government intends to get the Withdrawal Agreement approved – others like Keir Starmer will continue to interpret it as a catastrophic “cliff edge”:
https://www.theguardian.com/politics/2019/dec/17/michael-gove-fails-to-rule-out-no-deal-brexit
“Michael Gove fails to rule out no-deal Brexit”
Once again I refer back to this article published in June 2017:
https://www.politico.eu/article/germany-even-worst-case-brexit-will-be-bearable-for-eu/
“Germany: Even worst-case Brexit will be bearable for EU”
“The study simulates the effects of eight different Brexit scenarios on the German and the EU economy.
In the most positive scenario with a comprehensive free trade deal between the EU and the U.K., the study predicts a long-term output loss from a pre-Brexit trajectory of 0.1 percent for the EU and 0.6 percent for the U.K.
In the scenario where the U.K. and the EU fail to strike a trade deal and fall back on World Trade Organization rules, the study predicts the U.K. economy would lose 1.7 percent of economic output over the long-term, while German and EU GDP would be 0.2 percent and 0.3 percent below their previous pre-Brexit trajectories, respectively.”
OK, so since then the German IFO Institute has produced a new and more comprehensive study which estimates a rather higher loss for the UK, 2.8% of GDP:
http://johnredwoodsdiary.com/2019/03/07/euro-area-growth-falls-away/#comment-1001064
but even that is far below the deliberately exaggerated predictions from the UK Treasury under the direction of a a strongly Remain Chancellor, Philip Hammond.
December 18, 2019
Well the only excuse for flying in the face of all Central Banks, and taking another path completely ?
Sounds to me like The EU wanting to cut our legs off, because they know we will fly on our own.
and they are in a pit of there own makings.
So channels are open again with those possibly in the House of Lords , for the Remainers there to do the bidding of the E.U.
We know that a lot Remainers lost there seats, and serve them right.
However if you reside in the Upper House, you are totally un touchable, we can not deselect these individuals, witness the last leader of the Lib Demās, has just been give a seat there, no doubt in payment for her stance in trying to go against the majority vote and stop Brexit.
This treacherous lady was given this gold plated seat , sounds like the Establishment which is still trying to spik our chances once we are free.
Boris will need to be ruthless , he has been given our trust , heads should fall.
December 18, 2019
John, thanks for your good work – I think that the Conservatives urgently need to appoint a BOE Chair who is a CONSERVATIVE, because the current management seems to be deliberately damaging our economy.
December 18, 2019
I have just seen the video of one member of the opposition telling the press they have instructed their solicitor because another member of the opposition repeated some critical hearsay.
Whilst a person may have the right to threaten legal action against another if they repeat critical hearsay I think this behaviour by a politican is Stalinesque in its nature.
What will happen if this person gets into power. Will they silence any criticism by anybody not prepared to defend their criticism in court?
How many members of the presss has repeated critical hearsay of a politican ? Will anybody criticising or mocking this person also receive a threatening solicitors letter?
My advice for any Labour politican is not to let this MP in any position of power whatsoever or they risk receiving a threatening letter from a solicitor.
Being banished to the back benches is the only outcome a politican who does this should expect.
December 18, 2019
I hear our woke Bank of England Governor is dong climate change stress tests on the banking system. How ridiculous, as if a ray of sunshine will precipitate a banking crisis. What it will probably mean is that our banks will have to carry a certain level of poorly performing eco green investments making their balance sheets more vulnerable, and playing into the hands of the extinction rebellion lot.
December 18, 2019
OFF TOPIC.
Ineligible FOR LOSS OF OFFICE PAYMENTS were MPs who defected to the Lib Dems, such as former Tory ministers Sam Gyimah and Phillip Lee, and former Labour MPs Luciana Berger, Angela Smith and Chuka Umunna because they attempted, unsuccessfully, to win different seats to the ones for which they were originally elected.
My heart bleeds.
December 19, 2019
Fred H: “FOR LOSS OF OFFICE PAYMENTS”
There is a saving ripe for the picking. Abolish such payments.
If you are given a fixed term contract 5years, and you can’t make provision from your ample annual salary Ā£70+K by the end of five years to tide you over while looking for another job. You shouldn’t be anywhere near public finances, let alone government.
December 18, 2019
“This economy needs some combination of fiscal and monetary stimulus to get back to a decent growth rate.”
Without a severe amount of red-tape removal, e.g. canning IR35, removing the planned digital quarterly tax reports, and similar, there is little point in such stimulus. What the bank gives out, regulation and government immediately claw back, so the funds have no time to circulate within the economy and boost it.
December 18, 2019
Who do thinks owns and controls the Central Banks of the world, BoE included?
Carney is Establishment
Waiting for “The Donald” to take down the FED.
December 19, 2019
Ian Wragg has the nub of it:
“The BoE wants to create a recession so they can blame Brexit.
Why is Carney still here.”
Why was he, a Canadian, ever here in the first place? Likewise, why do we have a mid-Atlantic Head of the Serious Fraud Office (Lisa Osofsky)?
To:
The Rubes and Carney.
“This economy needs some combination of fiscal and monetary stimulus to get back to a decent growth rate.”
Why? Limits To Growth &c. &c….
Or to generate further lendings and ergo deposits to magick new money into circulation to pay the interest on the existing borrowings which our current 1694 insane system mandates?
The talley sticks burned down Parliament.
December 19, 2019
Why was he ever here in the first place? IHT ratter and tax to death Osborne brought him over at great public expense. Goodness knows why we know how dire most Oxford PPE chaps are and he was a deluded climate alarmist believer and EU enthusiast too!
December 20, 2019
Just how loose do you want monetary policy to be? Base rate is already 0.75%. lower than the rate of inflation. Building societies and banks offer 0.5% interest on savings – rising to 0.9% in some instances as a loyalty bonus.
Is the money lent by banks for mortgages covered by these savings? If not, is the size of the banks’ loan books excessive? Be advised that if the banks ever need to be bailed out again, the electorate will try to say ‘No’. Any Government that overrules them will suffer badly at the polls – deservedly so.
Since there isn’t a financial crisis, normal monetary policy would be to move towards base rate exceeding inflation by 0.5%.
Reply I want the Bank to have another funding for lending or LTRO scheme