Mark Carney hasn’t done a lick of work since becoming governor of the Bank of England (BoE) in 2013. He’s got an eight year term. He says he’ll step down after five. But the bank rate set by the BoE’s Monetary Policy Committee has been stuck at 0.5% since March 2009.
Carney would more properly be described as a talk show host. That’s the main job of central bankers these days. They don’t change interest rates. They change their tone of voice, their word selection, and their serious face for admonishing other people about money.
In a news conference yesterday, following the bank’s decision to leave the bank rate unchanged, Carney said Brexit could cause a recession. He said: “In that scenario we would expect a material slowing in growth, a notable rise in inflation, a challenging trade-off… Of course there’s a range of possible scenarios around those directions, which could possibly include a technical recession.”
And eagles could become men.
I jest. But of course there is a “range of possible scenarios” surrounding Brexit. The truth is simple: no one knows for sure. Why are Carney and the Treasury so keen to quantify what’s unquantifiable?
To be fair, there is a lot at stake. Things will change one way or another. It’s the bank’s job to try and sort out what’s best for the stability of the UK financial system. But even there, taking the side of “remain” could be short-sighted. How?
A change in the status quo will create instability. But that’s precisely what the EU and Europe’s moribund economy need. More innovation, more trade, more disruption and less stability. You can’t blame people like Juncker for campaigning against Brexit. He has a lot to lose, and he genuinely believes that the EU project makes Europe safer and people safer from themselves (by doing what they’re told by elites rather than making up their own addled minds).
But Carney? Osborne? Cameron? A large part of the British establishment doesn’t want things to change. I wonder why that is.
Category: Brexit