There are three certainties in life: death, taxes and former Bank of England governor, Mark Carney, blames almost everything on Brexit.
Last week, the Canadian, honoring us with a brief return visit, gave an interview which the associated newspaper headlined, ‘Brexit to blame for inflation, claims Mark Carney’.
To be fair, he wasn’t citing Brexit as the only reason, but it was part of his tiresome campaign to justify his extreme caution during the 2016 referendum.
At the time, he threatened that we would pay to ignore advice not to vote ‘Leave’ with rising unemployment, recession and crashing property prices. Leave aside that this is the opposite of inflation which he now claims to have predicted: none of these things happened.
He also predicted that sterling would fall – and, yes, it did. But as former Treasury economist Julian Jessop pointed out to me: ‘Even if the fall in the pound in 2016 was a result of the Leave vote, how will that affect our inflation in 2023?’
There are three certainties in life: death, taxes and former Bank of England governor, Mark Carney (pictured), blames almost everything on Brexit
An economist, Dr Andrew Sentence (pictured) who previously served on the Bank’s Monetary Policy Committee (MPC), warned in 2020 that ‘quantitative easing’ was a mistake.
Indeed, it is now clear that ‘quantitative easing’ (money-printing on a vast scale), which the Bank resumed in 2020, is a central reason why, by some measures, inflation is higher in the UK than in many others. developed countries.
One economist, who previously served on the Bank’s Monetary Policy Committee (MPC), warned in 2020 that this was a mistake: Dr Andrew Sentance.
As to why the Bank didn’t tighten monetary policy before it belatedly did in December 2021 (after Carney left), Sentance said: ‘We haven’t seen strong dissenting voices in the MPC for many years, and this continues a pattern established since Carney. became the governor.’
Or, as former chancellor Norman Lamont told me yesterday: ‘I see no evidence for Carney’s claim that Brexit is to blame for our higher inflation than other countries. Perhaps he should turn his eyes to the institution he was responsible for.’
To be fair to Carney, he did quit during the Covid crisis to restart the bank’s money-printing operations. But to omit this aspect of his analysis, and highlight Brexit instead, is risky.
It is also part of a pattern of behavior. Last October, in an interview with the Financial Times, Carney asserted: ‘In 2016, the British economy was 90 percent of Germany’s. Now it is less than 70 percent.’
His claim – that our economy has shrunk by 20 per cent compared to Germany’s due to Brexit – went viral.
Labor stalwart Pat McFadden (pictured), aptly described Carney’s indications of when rates might rise as ‘like an unfaithful lover, one day hot, one day cold’.
But it was demolished by Professor Jonathan Portes of the UK in a Changing Europe think tank, among others, who is no supporter of Brexit. He called Carney’s figure ‘a zombie statistic’, based on the measurement of two economies at prevailing exchange rates. No reputable economist does this when assessing the relative health of an economy over time.
As Professor Portes told me: ‘He’s picking a date when the pound was unusually high against the euro (January 2016), another when the pound was much lower, and then saying we’ve underperformed Germany by 20 per cent. It’s just complete bullshit. If you look at real annual growth rates in domestic currency, the UK and Germany have grown by the same amount since 2016.’ Indeed, Germany is now in recession.
It may be that one of the reasons for our high inflation rate is that our consumer spending has been more buoyant than the Eurozone as a whole. It has nothing to do with Brexit either.
It rather amazes me how much credibility is attached to what Carney says (the BBC gave him its highest praise for making him a Wrath lecturer). As governor, his big idea of ’forward guidance’ on interest rates was a model of confusion.
Labour’s impressionist Pat McFadden, now shadow chief secretary to the Treasury but then a member of the Commons Treasury Select Committee, aptly described Carney’s indication of when rates might rise as ‘like an unfaithful lover, one day hot, one day cold’. That was 2014.
I’m no great prognosticator, but I can’t stop myself from reminding readers of what I wrote a year ago the week Carney took office as governor.
He was given a standing ovation from the Treasury Select Committee, with the FT reporting that ‘MPs from all sides rushed to congratulate him. [him]’
But in a column titled ‘We’d be wise not to put too much faith in Carney’, I wrote that he ‘looms over the horizon as the nation’s most powerful unelected official… We should regard the claims of central bankers with extreme skepticism. Both America and the UK know when the time is right to end the current policy of money-printing.’
And they don’t. Mr Carney should think more about this than rebuilding Brexit, even if he still can’t believe that the British refuse to respect his infinite wisdom.
Modest men who declined the peerage
Nadine Dorries wrote here last week about how ‘heartbroken’ she was that Boris Johnson had reneged on a promise he made to her. His openness about his depression is most unusual. But even more unusual are those who are offered a peerage, yet refuse it themselves.
One such person was my distant cousin Raymond Monbiot, whose obituary appeared in The Times last week. He was a highly successful businessman, rising to the top of companies such as Associated Biscuits and Campbell’s Soup, before setting up his own firm that helped turn around struggling enterprises.
But he also devoted his life to the Conservative Party, starting as a councilor and becoming chairman of the party’s national conference. He would have been an outstanding member of the House of Lords but, as the obituary reveals, when offered, he declined it.
John Freeman (pictured), a World War II ‘desert rat’, was described by Field Marshal Montgomery as ‘the best brigade major I ever had’.
I can think of two other men who made similar decisions: one I knew well, the other little. The first was Stuart Wheeler, who made a fortune founding the IG Index and in 2001 kept the then-ailing Tory party afloat with a £5 million grant.
But he paid that sum – still the largest single donation of its kind – on the clear understanding that he never wanted any honors such as peerage. Stewart, who died in 2020, was a wonderful man whose donations to numerous charities, including Human Rights Watch and Freedom from Torture, were much less well known.
Then in World War II John Freeman was a ‘desert rat’, described by Field Marshal Montgomery as ‘the best brigade major I ever had’.
Freeman went on to become a Labor MP, whose major uniformed speech at the opening of the first post-war parliament reduced Winston Churchill to tears, saying: ‘Now all the best young men are on the other side.’ After leaving Parliament, Freeman was chosen by Labor as our ambassador to Washington and then gained unusual fame as the presenter of the BBC TV interview series, Face to Face.
Unusual, as Freeman insisted that his own face was never seen. This was an aspect of his modesty and perhaps explains why he also declined the proposed peerage.
When I visited him at his home three years before his death at the age of 99, he told me: ‘I don’t see why my life could be of any possible interest to anyone.’
Men like Monbiot, Wheeler and Freeman now seem to belong to another era. If only we had more like them in today’s House of Lords.
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