Post-Brexit Body Count: Mark Carney is the Last Man Standing
With the greatest respect to the 19,240 British soldiers who died on 1 July 1916, the carnage that has followed the Brexit vote almost 100 years later has seen an astonishing cull of the country’s leaders.
Prime Minister David Cameron has fallen on his sword, Boris Johnson has abandoned the ambition that fuelled his sudden volte face in favour of the Leave campaign, while Rino (remainer in name only) Jeremy Corbyn is hanging on to the Labour leadership by his finger nails.
Michael Gove is limping toward defeat in the Tory party leadership campaign after knifing Boris in the back, while Nigel Farage is content to step down as Ukip leader and revel in his victory by insulting fellow members of the European Parliament. A revolution, like Saturn, will always devour its own children.
August independent think tanks have been derided by Gove as experts that no one has faith in, while pollsters and bookies are nursing heavy losses (again).
Strange to say but the one person to emerge with honour intact is Mark Carney, the Canadian who has run the Bank of England for the last three years.
During the campaign he sparked the ire of the Leave campaign by warning that a decision to quit the European Union could lead to the UK falling into recession, sterling to decrease in value and businesses to relocate over time.
Conservative MP Jacob Rees-Mogg called on him to resign while fellow Tory and arch Leave campaigner Iain Duncan Smith said that Mr Carney needed to be “very careful” about making such comments.
But as 24 June dawned, sterling slumped by 10%, a roll call of banks started hinting they would relocate staff, and a snapshot survey of the construction industry pointed to a fall to a seven-year low, it became clear his warning had just been an honest prediction.
And while those in Project Fear could be accused of scaremongering, Mr Carney was actually able to do something to try to avert the worst outcomes.
In a calm address that contrasted with the near-tearful speech by Cameron, the buffoonery of Boris, and the cynicism of Gove, Carney was able to state that the Bank judged the risks around the referendum were the most significant, near-term domestic risks to financial stability but that it had put in place extensive contingency plans.
Carney needs continued benevolence from foreign investors as he seeks to steer the UK through stormy waters
The Bank is likely to cut interest rates on 14 July to 0.25% and again on 4 August to zero if necessary with the potential for a further £250bn of quantitative easing to follow.
The granting of operational independence to the Bank of England may be one of Gordon Brown’s longest-lasting achievements. The backbenchers’ calls for a political defenestration of Carney were misplaced.
But his job is not done. With the pound still down against both the euro and the dollar, the higher cost of imports will start to feed through to inflation before long.
Starting with the latest Financial Stability Report due out on 5 July, he and his colleagues and the Bank will have their work cut out to maintain confidence among both domestic players and international investors.
A key concern will be the size of the current account deficit - the gap between the goods and services we export and those we import. At 3.7% of gross domestic product, this is large by international standards.
As Disclaimer has warned, as long as 16 months ago, our ability to fund this shortfall relies of the continuing kindness of strangers to put money into our economy.
Given the decision by all the ratings agencies to lower their assessment of the UK’s ability to repay its debts, this job may have become just a little harder. With his domestic foes sharpening their knives, Carney needs continued benevolence from foreign investors as he seeks to steer the UK through stormy waters for the final two years of his term.
Sadly, it took a Canadian to steady the ship after the Bullingdon Club boys had finished their bun fight. Now that Theresa May and Andrea Leadsom have emerged as leading contenders for the Tory crown from the male-created wreckage, Carney really is the last man standing with his reputation intact.
About the author
Phil has run Clarity Economics, a London-based consultancy, since 2007 and, before that, was Economics Correspondent at The Independent.
Phil won feature writer of the year Work Foundation Work World media awards in 2009, and was commended by the Royal Statistical Society in 2007.
Enjoyed this article?
Help us to fund independent journalism instead of buying:
Also in Disclaimer
United Nations does not currently enjoy the best reputation. Founded in 1945 as a way of both preserving and enforcing peace, the United Nations was designed to fix problems where its predecessor the League of Nations failed. peacekeeping. Now it is being characterised in much the same way, seen as toothless, impotent and irrelevant.
Among hard Brexiters, re-engaging with the Commonwealth offers one of the more seductive “opportunities of Brexit”. The Commonwealth secretary-general, Patricia Scotland, has pledged to “turbocharge the Commonwealth trade advantage”. But a closer look suggests that Brexit cannot create a new economic role for the Commonwealth.
Many of the Windrush Generation who arrived between 1948 and 1973 never planned to travel outside the UK again. Suddenly, they needed passports to keep their jobs and access vital services such as healthcare. Despite evidence of them having lived here for decades, the Home Office decided not to believe them. How could things go so wrong at the Home Office that it too did not consider them British?
bad ideas and notions ultimately hurt the Left and help the Right. Whether it be conspiracies, fake news, factoids, bad rhetoric, or mud-slinging, all it does is feed into right-wing assertions—sometimes unfortunately accurate—of leftist hysteria, intolerance, and untrustworthiness.
The homelessness epidemic faced in developed countries has been described as a humanitarian crisis unfolding in our streets. There’s a direct correlation between the rising cost of living in cities and the severity of homelessness. This crisis has reached a point where it’s drawn comparisons to poverty in developing nations, as homelessness jumps to record-breaking levels in the U.S. and further afield.