Mark carney

Will Mark Carney’s intervention set the tone for the EU referendum?

In 48 hours’ time, Mark Carney will make an intervention on Britain’s membership of the European Union. According to this morning’s newspapers, the Bank of England governor will deliver a speech on Wednesday evening at St Peter’s College, Oxford to ‘coincide with the release of a report into how Britain’s membership of the European Union affects the central bank’s ability to manage the economy, and how it affects its ability to protect the country’s biggest banks’, according to the Daily Telegraph. That might sound as if Carney is going to deliver the findings of a pedestrian report, but given it has been briefed out to several newspapers, the Bank is clearly hoping everyone

The spectre haunting George Osborne

Rather more attention was paid last week to the strange position of George Osborne’s feet than to the dark shape lurking behind him. My own theory about his stance on the conference platform is that he was imagining himself as a operatic tenor, belting out an aria in praise the magic elixir he has administered to the formerly consumptive heroine, the UK economy, and pitching to be her next prince. But operas, like political careers, tend to end badly: so why the rumbling bass notes from the orchestra pit, and what is that sinister thing in the shadows? I’m not talking about Corbyn and McDonnell fighting in a sack with

The real ‘Super Thursday’ will be when interest rates rise

Turn-up. Eat lunch. Swap a few pleasantries with the other people in the room, leave interest rates on hold, and then collect a cheque on the way out. I am starting to wonder why I can’t have a job on the Bank of England’s Monetary Policy Committee. It certainly doesn’t look terribly difficult. This week, the Bank is making a change to its usual routine. Instead of just announcing the latest monthly decision on rates, it is also releasing a vast amount of fresh information on the economy, in a move that the media have already dubbed ‘Super Thursday’, presumably on the grounds that unlike plain old ordinary Thursdays, City

People are avoiding retirement because of low interest rates. Who can blame them?

‘Bank of England says that migrants are holding down wages’ the headlines screamed this morning. Yet Mark Carney, when interviewed on the Today programme this morning, spun a slightly different story. Migrants bear some responsibility for downwards pressure on wages, he said, but not so much as another group of people: British workers in the 50s and 60s who are returning from retirement, or who never retired in the first place. Over the past two years, net migration is up by 50,000, but that number is dwarfed by 300,000 people whom the Bank of England would normally have expected to have retired by now, but who have carried on in

Why cheap oil could mean a Labour victory

BP’s profits are down, and the oil giant is slashing up to $6 billion out of its investment plan for the year. At Shell, the cut could amount to $15 billion over the next three years. At troubled BG, still waiting for new chief executive Helge Lund to arrive, capital spending will be a third lower than last year. I wrote recently of ‘consequences we really don’t need’ as the oil price continues to plunge: cheering though it is for consumers (and good for short-term growth) to find pump prices at a five-year low, the full impact will not be felt until a decade hence, when projects cancelled now might

Portrait of the week | 20 November 2014

Home David Cameron, the Prime Minister, said: ‘Red warning lights are once again flashing on the dashboard of the global economy.’ He then offered £650 million to a ‘green climate fund’. In a speech in Singapore, Mark Carney, the Governor of the Bank of England, said that fines for banks over rigging foreign exchange rates showed that ‘it is simply untenable now to argue that the problem is one of a few bad apples. The issue is with the barrels in which they are stored.’ Official figures showed that the number of British Army reservists has been boosted by a recruitment drive in the past year from 19,290 to 19,310. Friends of the

Storm warning: the world economy’s October troubles aren’t over yet

October is always a turbulent month, and I’m feeling uneasy about this one. The FTSE100 index, which looked set to break through 7,000 in September, has lost more than 500 points since then — and would have lost more but for manoeuvres in the mining sector. Pessimism stalks the bond markets, and even a falling oil price is read more as a harbinger of faltering growth than a stimulus for further recovery. Ebola is the new volcanic ash cloud, and attention is focused on the apparently incorrigible weakness of the eurozone — where the biggest problem is what was long seen as the most potent solution, namely the German economy.

Up the workers!

Mr S was interested to read that Mark Carney has sounded the alarm on low wage growth. In light of yesterday’s announcements, the Times’s business commentator Andrew Clark calls for bosses to ‘display a modicum of largesse’ to sustain the economic recovery. Mr S hears on the grapevine that business leaders are planning to open their pockets at the end of this year, if only to stop Ed Miliband, who is regarded with a certain amount of distrust. The thinking is that a wage rise will undermine Labour’s (increasingly successful) rhetoric on the cost of living. Mr S wonders: will a prominent Tory use the party conference, the last before

Interest rates are poised to rise – which means we’ll find out how much of the recovery is real

Mark Carney’s hefty hint that interest rates could rise sooner than markets anticipate is politically awkward but important, as until they do so, we shall have very little idea of how much of the recovery is based simply on cheap debt and how much of it is real. The car industry and house sales, for instance, benefit from ultra-low interest rates, and while they appear to be booming, it’s not clear how much of that boom is pushed by the bellows of cheap debt. What’s more, the current situation punishes those who are doing exactly what the government wants them to do. When he announced the ‘savings revolution’ in this

Portrait of the week | 22 May 2014

Home Demand for housing posed ‘the biggest risk to financial stability’ according to Mark Carney, the governor of the Bank of England. House prices rose by 8 per cent in the year to the end of March, according to the Office for National Statistics, and in London the increase was 17 per cent. The annual rate of inflation rose to 1.8 per cent in April from 1.6 per cent in March, as measured by the Consumer Prices Index; it remained at 2.5 per cent as measured by the Retail Prices Index. The underlying annual profits of Marks & Spencer fell by 3.9 per cent to £623 million, putting them behind

Why I’ll join the silver stampede to cash in a pension

At the beginning of the last decade, a young man who claimed to be my ‘premier banker’ paid me a visit. He was accompanied by his boss, evidently there to assess the junior’s performance. Once upon a time — at least in popular imagination — bank managers were kindly, cautious, long-term advisers, but by the turn of the new century they had become shameless product-pushers with targets to fill, and it was obvious from the body language of both visitors that this poor chap had to sell me something by the end of the call or his job was on the line. So I took his ‘advice’, signed for a

An EU referendum isn’t ‘bad for the economy’ – businesses want it to happen

Mark Carney has been a very successful Governor of the Bank of England. Since coming to office in June last year, the British economy has gone from strength to strength. Although Mr Carney can’t take all the credit, on his watch unemployment is falling rapidly and business confidence is at a record high. His appointment and policies have been met with general approval by the UK’s business leaders, which is to be welcomed. So it is a shame that yesterday there were reports that the Governor thinks an EU referendum would be ‘bad for the economy’. The claim stems from the Governor’s comments on the Andrew Marr show on Sunday. In response to a

Any other business: The £1 bet that built a 1,000-strong company

At a charity lunch in Manchester, I meet a cheerful ‘engagement manager’ from, formerly Appliances Online, a fast-growing internet seller of fridges and washing machines headquartered at Horwich near Bolton. The job title is new to me: it turns out to mean engaging the company’s workforce in ways that help them enjoy their jobs and feel valued. Their employment package features a £4-a-month ‘healthcare cash plan’ including dentistry, days off for charity work, gym memberships and a 50 per cent subsidy for ‘any social activity our staff fancy, so long as it develops their skills and is done by more than four people’. The emphasis on well-being and fun

The Battle for Threadneedle Street

I thought it obvious that Mark Carney’s trip to Scotland yesterday was a bad day for Alex Salmond and the Scottish nationalists. Sure, the governor of the Bank of England said, a currency union between Scotland the the rump UK could happen and be made to work but it would be fraught with difficulty and sacrifice too. Do you really want to do that? How lucky do you feel? Carney, being a Canadian and therefore a man crippled by politeness, did not add “punk”. In response the SNP were reduced to pushing a meaningless poll which found 70% of Britons favouring a currency union after independence. That is, 70% of

Alex Salmond writes a cheque – in pounds sterling – he cannot honour

As I type this, Alex Salmond and Mark Carney are chowing over porridge at Bute House, the First Minister’s official residence in Edinburgh. There is always the risk of exaggerating the importance of these things but this morning’s meeting with the Governor of the Bank of England may be the most important encounter Alex Salmond has this year. The question is simple: will an independent Scotland be able to forge a currency union with the rump United Kingdom? The answers, for all the First Minister’s bland assurances that such a union is in everyone’s interests, are not so simple. Like poker players, politicians often have a “tell”. When Salmond offers

Miliband’s big speech challenge isn’t Mark Carney

Even though Labour is quite clearly rather peeved by George Osborne’s minimum wage announcement, it is, in one way, a compliment to Ed Miliband that the Chancellor felt it strategically important to try to sabotage the Labour leader’s speech on banking, which he will deliver shortly. The Conservatives are aware that even if Miliband has a knack of coming up with policies that sound potty, he also has a knack of framing them in a way that disrupts the political debate. Thus a pledge by a party leader in the autumn to control prices in a market where he has no control of worldwide wholesale markets still managed to cause

Britain is booming. So do we still need ultra-low interest rates?

Car sales are up 11pc, making the FT splash this morning. House prices are soaring again, up 8pc last year. And the British Chamber of Commerce has this morning released its Q4 survey showing a startling surge in investment, orders and employment (graph, above). Good news for George Osborne’s plan for a ‘balanced’ recovery: manufacturers’ capacity use, confidence and employment difficulties are at the highest since the survey began in 1988. The upshot, as Citi says (pdf) is that the UK economy will likely grow far faster this year than Osborne’s cautious official expectation. He will most likely have another healthy upgrade to announce in his next budget. Citi expects

Carney may call for the end of Help to Buy sooner than you think

Mark Carney’s speech to the Economics Club of New York yesterday made clear that very low interest rates now ‘put a premium on macroprudential policies’. Translation: he’s not going to hike interest rates soon, but he wants us to know that there are other levers he can pull to keep the UK economy on track. What are those levers? First, Funding for Lending. Two weeks ago Mark Carney announced that the scheme – which offers banks cheap funding if they increase lending to the real economy – would no longer be available for mortgage lending. It will only be open for loans to companies. That’s a lot more than just

The economy is booming, says the Bank of England. So why won’t it raise rates?

Yet another survey suggests that Britain is booming – this time, it’s from the Bank of England’s Monetary Policy Committee. They’re the guys who kept interest rates too low for too long – creating the last boom. It sees another boom now.”For the first time in a long time you don’t have to be an optimist to see the glass is half full,” said Mark Carney, the new BoE Governor. “The recovery has finally taken hold.” Citi has crunched latest BoE figures (pdf) and says this envisages real GDP growth of a stonking 3.4 per cent next year and 2.8 per cent the year after, which it says is one

Tax cuts R us! Ten points from David Cameron’s Marr interview

Here’s what jumped out at me from David Cameron’s interview with Andrew Marr in Manchester this morning: Tax cuts: the Tory weapon ‘As this economy has started to recover, it’s very difficult for people to make ends meet. Their wages are relatively fixed, and the prices are going up. That’s why cutting people’s taxes is so important. That’s why lifting people out of the first £10,000 of income tax is so vital. That’s why freezing the council tax matters.’ So Cameron acknowledges Miliband’s premise, that the cost of living is an issue, then presents tax cuts as the solution. Precisely the right strategy, as tax cuts are bankable and Miliband’s