Carney: Brexit Risks Have “Gone Down”

Some prize comments from Mark Carney which went under the radar in the excitement of Trump yesterday. The Bank of England governor now says he is “surprised” his forecast of an immediate post-Leave vote slump has not come true, admitting the BoE is “very likely” to improve its economic forecasts:

“Of course having got through the night the day after the scale of the immediate risks around Brexit have gone down.”

Apparently the EU now has more to worry about than us:

“there are greater financial stability risks on the continent in the short term for the transition than there are for the UK”

The stock market is enjoying a bull run and breaking all records. In November the BoE already doubled its forecast for 2017, the biggest single upgrade it has ever made to a prediction, and now it is likely to upgrade it again. Experts…

Bank of England Boss Boldly Blasts “Scare Stories”

Savour this mea culpa from Bank of England chief economist Andy Haldane, when asked why experts had got the aftermath of a Leave vote so badly wrong:

“It’s true, and again fair cop…If you look at how the consumer performed during the course of the last year it’s almost as though the referendum had not taken place. In terms of the real things like pay and jobs not very much happened during the course of last year. It’s pretty much business as usual. The spending power in people’s pockets was not materially dented… Maybe some of the scarier stories politically will be seen to be just that – scare stories.”

Haldane calls “the crisis in economic forecasting” its “Michael Fish moment”. At least Michael Fish genuinely misread the data unlike the Bank of England which under Carney chose to join the Osborne’s Project Fear…

FT Carney Exclusive Stays Exclusive

ft

Contrary to the front page of this morning’s FT, Mark Carney will not serve a full 8 year term at the Bank of England, he will step down two years short of that in June 2019. Oops…

Bank of England Rubbish Osborne’s Brexit Fibs

osborne balls

George Osborne’s claims that voting to Leave would cause interest rates to rise and a year-long recession have been demolished by the Bank of England. Osborne’s Treasury forecast of the two years following a Leave vote predicted GDP at between -3% and -6%. Today’s Bank of England numbers forecast GDP unchanged at 2% for 2016, dropping to 0.8% in 2017 and rising again to 1.8% in 2018. They have cut interest rates and said there will be no recession.

Osborne also claimed unemployment would rise 2.4 points to 7.3%. The Bank of England forecasts an unemployment rate of 5.6%. This is what the Treasury was threatening:

osbo

The Bank of England now say this was all nonsense. Final proof the Remain campaign were fibbing all the way to the ballot box…

Anyone for Brexit? Mark Carney’s Day Off at Wimbledon

carney at wimbledon

Three days ago Mark Carney told us how he was “rapidly putting the main elements of a plan” into place to deal with an “extended period of uncertainty” post-Brexit. Well the plan must be going pretty well since Carney has taken the day off to watch the tennis at Wimbledon with Jude Law. He was watching Roger Federast…

Mervyn King: ‘Doom and Gloom Wildly Exaggerated’

“There are some threats from the EU that will no longer be relevant. So, the idea there might be a tax on financial transactions – which George Osborne challenged, took to the European Court of Justice and lost his case – now we won’t be involved in that, and my guess is that any attempt in Europe to impose such a tax will never take place now because business will simply come to the City… There are obviously uncertainties in the short run… but the idea that this is a doom and gloom story seems to be wildly exaggerated.”

Project Calm from the former Bank of England governor…

Carney: We Will Make Brexit Work

This is what the BSE campaign’s Will Straw press released following Mark Carney’s speech on the EU last month:

“The Governor of the Bank of England has now overwhelming made the case that our membership of the EU single market increases our stability, our dynamism, and our economic growth. Day by day, one by one, the out campaigns’ economic arguments are falling apart… the person responsible for maintaining Britain’s financial stability [has] unambiguously underlined the value to the UK economy of our place in the EU, and that Britain is stronger, safer, and better off inside Europe than we would be out on our own.”

Are Remainers telling the truth when they claim Carney “overwhelmingly” and “unambiguously” reckons Britain will be weaker, less safe and worse off outside the EU?

The Bank of England governor was on Sky News this morning, where he slapped down the scaremongers by insisting he will make Brexit “work” if that is what “the British people decide“.

“Our job is to make whatever the British people decide work. And there’s a status quo, we’re making that work and we think it is working, but if things change we will do what’s necessary.”

It is also worth pointing out that Carney is also on the record warning “the majority of the legislation and regulation applying to the financial sector in the UK is determined at EU level”, and that the EU was “a key link in the chain” by which the financial crisis affected Britain. Don’t believe the BSE spin: Carney’s actual “unambiguous” position is that the Bank of England will be able to do its job whatever the outcome of the referendum…

Wonk World Whacks Carney

The new Governor’s first big day at the office has gone down rather badly in wonk world: The IEA call it “the most dangerous development in UK monetary policy since the late 1980s.”:

“Monetary policy should be designed to ensure that we have stable prices. The level of unemployment is mainly determined by a range of factors such a labour market regulation, the benefits system, tax rates and so on. To try to use monetary policy to reduce unemployment when inflation is already above target is playing with fire and could lead us down the road that we followed in the 1970s. This move also calls into question the independence of the Monetary Policy Committee and the Bank of England’s ability to fulfil its statutory duties.” 

The Adam Smith Institute accused him of “fumbling in the dark”:

“Mark Carney had the leeway to make radical change here but he’s bottled it with baby steps… unemployment and inflation come from both aggregate demand (which the bank can control) and aggregate supply (which it has essentially no control over). Since neither of these numbers distinguish between changes in supply or demand, the Bank is still fumbling in the dark with its guesses over whether a change in inflation comes from demand (which means it should react) or supply (which means it shouldn’t). This means firms are still left guessing, and it means that uncertainty still reigns.”

Well that went well then.

Three More Years of 0.5% Interest Rate

Mark Carney has announced UK interest rates will be held at 0.5% until the unemployment rate falls to 7%, which is forecast to happen in late 2016.

Which will be nice midterm treat for whoever wins the next election…[…] Read the rest

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