Vocal Voices

I must admit I did wonder if he'd made the connection that the UK government will interfere more and more in the BOE as we struggle to get out of the EU trading and float ourselves on the world market again.

It's funny really when they talk about BOE "independence" then complain that the BOE tried to manipulate people in the referendum.

The head of the BOE is a Political position. If anyone doubts it, just go and read the reams of toilet paper written about the ECB, an "institution" of the EU and the fact that Mario Draghi is a Politician, not a banker.

Carney must have realised, once the vote was over, that he had damaged his political credentials by becoming so invested in the entire referendum debate. It was clear to me, at the time, that the only way Carney could come out unscathed was if Remain won. Of course it was expected that Remain would win so his gamble was small.

But he lost and is just another of the political figures who has fallen on their sword as a result. Of course as the governor of the BOE he can't just up and resign, he would never get another job of the same kind again. But negotiating a transition phase which takes the UK over the end of Brexit and into new waters is a good compromise. It's beyond his original contract and allows him to take the moral high ground.

But. When history is written 50 years from now. He will be written up as one of the political casualties of one of the largest political gambles in the 21st century.

I wish him luck. But I'd also put the BOE back under political control, when he's gone, where it belongs.

The BoE's independence has always been a misnomer. It might be independent in setting monetary policy, but it is wholly owned by the Treasury, so there has to a conflict there, somewhere.

Part of its job is to predict future economic conditions, and act accordingly, so there cannot really be any complaints about what it though that Brexit would bring. It was doing what it is supposed to do, and other so-called independent commentators were predicting the same. It has not been proved wrong - yet.

As for Carney, I do not know what he is playing at. He could have gone next year when his 'official' contract was up, or he could have stayed the traditional eight year distance and gone in 2021. Instead he has chosen to stay till just after Brexit, should May trigger A50 in March, in June 2017.

So, three choices: Go, and let someone who believes in Brexit take the job on; Stay, and do what he does not believe in, then do a runner; Or stay the full term and take the hit on his CV.

To me Carney is looking after Carney.

Workingman wrote:To me Carney is looking after Carney.

I agree. There is a school of thought in Business which says that if you are in an impossible situation, but you are the boss, stay and manage the expectations until you can leave with spun and massaged messages...

In terms of the predictions and actions, I take serious issue. The BOE "predicted" massive economic impact immediately after a Brexit vote. Then they took immediate action.

All looks pretty normal. Until you go back and leaf through the tomes of previous statements by central bankers. The Action Carney took immediately after Brexit will reach it's fruition somewhere between Christmas and March. Because that's how long it takes to filter through.

In order for his predictions and his actions to marry up, the UK would have had to experience economic contraction and serious issues from August thought to December. in fact, not only has the UK not experienced the predicted damage to it's economy, but, in fact, the UK has done what it has been doing since 2010. Namely growing ahead of the world economy baseline and doing strong trade and being healthy.

The action that the BOE took in August trashed the £ and fuelled an export led boom which can't last and will drive inflation much faster than we can afford. Forcing the BOE to, eventually, back down and raise rates. Which will, in the end, cause people lost homes and lots of misery. Meanwhile, the second the market sniffs a stalling in BOE activity and a potential for raised rates, the pound is going to climb. Damaging the export led boom and driving businesses out of business.

Essentially the very boom and bust the "independence" of the BOE was supposed to stop.

It may not have been proved wrong. Quite yet. But when it is, the action it took will be shown to have damaged the UK economy fully as much as the projected Brexit impact.

Which was not his job to do. Yes, today, they are talking themselves backwards out of the mess they are in. But eventually they'll have to stop talking and start acting. That's when the pain begins.....

I think Carney wants to be the voice explaining that.