UK Economics


Carney plays a canny game

Mark Carney, a lead doomsayer in the run up to the referendum, is seeking to both vindicate his assumption that Britain would be knackered if we voted to leave and present himself as the saviour of Great Britain now that we have.

His job as governor of the Bank of England is to guide national and economic monetary policy. It was therefore decidedly unwelcome when he sided with the ‘remain’ campaigners in the June referendum. One of Carney’s key jobs is to reassure markets that the Bank of England is prepared under any circumstances. Perhaps then he should have spent his time talking to the institutions and businesses about the positives of a vote to leave, rather than campaigning for the UK to remain part of the EU.

However, once the vote to leave the EU became apparent, Carney was one of the first faces to appear when it seemed that the UK was not going to descend into fire and brimstone, not with his tail between his legs, but instead with a smug grin on his face declaring ‘the strength of the UK’s institutions’  (read “the Bank of England”) was responsible for the UK economy weathering the remainers’ malaise.

His first major act since the referendum is to lower interest rates to 0.25%, a meaningless reduction from an already rock-bottom standpoint, and to announce more quantitive easing into an already potentially inflationary environment. Aside from the fact that neither of these measures address the real issue of political and social uncertainty weighing on the economy, they will be considered the actions of an economy on the brink of meltdown with the subsequent effect of furthering the negative perception of the UK following Brexit.

This is his cunning game playing out to full effect – throwing unnecessary stimulus at a stable economy in order to both highlight the ‘trouble’ we are in, whilst also being able to claim the victory once everyone starts to acknowledge the benefits of leaving the EU and the opportunities this presents.

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