Sterling tumbling, gilt yields at near record lows, balance of payments dire, business confidence flatlining: no wonder Mark Carney brought the eleven horsemen – and women – of the apocalypse with him to the Treasury select committee.
The Bank of England governor usually just makes do with a couple of flunkeys – just as a precaution, to make sure he doesn’t nod off – to these meetings; for this one he’d come mob-handed with an entire football team.
Carney often appears to be in a state of suspended animation, hovering in a blissed-out no-man’s land of semi-conscious unconsciousness, but for this appearance he was fired up. By which I mean his eyes were open throughout and the occasional flash of red peeped through his permatanned complexion; the governor isn’t one to waste energy. But he was definitely annoyed.
For the past three years his sole purpose in life had been to do absolutely nothing, but for the past couple of months he had been rushed off his feet. If he’d known there was going to be a referendum on Britain’s membership of the EU, he’d never have taken the job.
Proceedings got under way with committee chairman Andrew Tyrie reminding Carney that in the run-up to the referendum two former chancellors – Norman Lamont and Nigel Lawson – along with two former Tory party leaders – Iain Duncan Smith and Michael Howard – had accused the Bank of England of lacking credibility and independence by ‘peddling phoney forecasts’ about the economic consequences of Brexit. “Why do you think they said that?” he asked.
Carney’s eyes replied, ”because all four of them are total halfwits who shouldn’t even be trusted to run a PayPal account”; his voice drawled: “You’ll have to ask them.”
Fair-minded as ever, Tyrie tried to balance things out by pointing out that not every Brexit-supporting politician had been quite so scathing about Carney’s efforts to stop the British economy from hitting the rocks. “Boris Johnson says you’ve been doing a marvellous job,” he observed. A thumbs-up from the man who has managed to be wrong about almost everything in the past few weeks wasn’t quite the endorsement he would have liked. But what the hell? “Any port in a storm,” he said.
It was like this, he continued. There had been no stitch-up between the Bank and George Osborne to terrify the country; all his forecasts had been entirely robust and – much to his astonishment – completely correct. As far as he knew, he was the first economist in living memory to have been accurate about anything. If he wasn’t such a laid-back dude, it could have been enough to make him doubt himself.
The pro-Brexit Jacob Rees-Mogg was unconcerned that Carney’s forecasts had been right; his complaint was that they had been made at all. The usually sane Jacob seems to have subscribed to an obscure offshoot of solipsistic phenomenology in which thoughts are automatically transformed into an external reality. If only the Bank of England had just kept its mouth shut, then there would never have been a run on the pound. That approach hadn’t worked out too well when the Bank had buried its head in the sand in the run-up to the 2008 financial crisis, but there was always a first time.
Carney just couldn’t win. The Brexiters were accusing him of doing far too much in the run-up to the referendum and the Remainers were hinting that he hadn’t done nearly enough to stave off disaster in its aftermath. Labour’s Rachel Reeves queried whether the extra £150bn of lending the bank had made available would keep a recession at bay.
“It should be more than fine,” he said, “because everyone is so terrified at the moment no one wants to borrow anything.” Sod it, he thought. He’d had enough of being given a hard time. He was ready for some revenge. Time to bore the committee to death. “Counter-cyclical contagion … Challenges to Italy at the acute end of the spectrum… I want to broaden the broader contagion problem… Thirty years of stagnation.” That last remark was aimed just as much at the committee as the economy.
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