Mark Carney’s attack on Liz Truss has disgraced the Bank of England

He was a ‘global superstar’. He was the smartest finance official of his generation. He would bring global contacts and experience. When Mark Carney was appointed as the first foreigner to run the Bank of England he was meant to be a refreshing, technocratic figure who would blow some of the cobwebs off the institution. And yet, with his attack on Liz Truss for creating ‘Argentina on the Channel’, Carney has become a disgrace to the Bank.

No former governor should ever be so openly partisan. Indeed, if anyone imposed Argentinian-style monetary policies it was possibly Carney himself.

There was no mistaking the ferocity of the attack. The day before Liz Truss launched a defence of her premiership, Carney used the podium of the Global Progress Action Summit – hardly a neutral sounding event – to criticise her policies. He accused her administration of creating ‘Argentina on the Channel’, and took a pop at Brexit supporters for the ‘misguided view’ that cutting taxes and government spending leads to economic growth. Carney then accused them of wanting to ‘tear down the future’.

Carney has now retired from the Bank and he is, of course, entitled to his view. There are, however, two problems with his intervention. The first is that it is unheard of for a former governor to be so openly partisan. Predecessors such as Mervyn King or Eddie George may have hinted at their views, but they never targeted an active political leader so directly. If that continues, it will be hard for the Bank to claim it is ‘independent’ for much longer. It would surely be better for Carney to maintain a dignified silence on British politics. 

The second problem is this. During his time in office, Carney took interest rates down to the lowest in three centuries, printed money on a vast scale, and allowed regulation to become so hopeless that pension funds could not survive a modest rise in gilt yields. If anyone turned the UK into ‘Argentina on the Channel’ it was more likely the governor over eight years than the former PM over 40 days.

Carney was a poor leader of the Bank. But in the years since, he has become a disgrace to the institution he once led – and with his attacks on British politicians he is simply embarrassing himself.