Mark Carney has consistently got it wrong over Brexit, says TIM NEWARK
AS the British economy grows again this quarter, Jacob Rees-Mogg is right to blast Bank of England Governor Mark Carney for consistently undermining Brexit with his dire predictions.
Jacob Rees-Mogg brands Mark Carney an 'enemy of Brexit'
With even Chancellor “Misery” Hammond having to accept that the British economy has “outperformed market expectations”, it is clear now that Carney was wrong to cut interest rates straight after the Leave vote, making sterling fall further than it needed, which has then ramped up inflation.
Again and again Carney has called it wrong about the economic impact of Brexit.
He warned that Britain would be plunged into recession after a Leave vote and that leaving the EU represented the “biggest domestic risk” to the UK economy.
Unemployment would rise, house prices would collapse, consumer confidence would be dented. Wrong, wrong, wrong.
His forecasting failure has been compared to that of Michael Fish ignoring the hurricane coming our way in 1987.
In Carney’s case he predicted a catastrophe and all we’ve had is balmy good news on the economic front.
But at least Andy Haldane, senior economist at the Bank of England, had the decency to admit the disconnect between their predictions and the reality.
“If you look at how the consumer performed during the course of the last year, it’s almost as though the referendum had not taken place,” he said earlier this year.
“It’s pretty much business as usual.”
In fact, it’s better than that with unemployment at record lows and our economy continuing to grow.
During the referendum campaign Carney was clearly doing Cameron and Osborne’s bidding, helping them with their Project Fear.
But afterwards, when the nation had decided, it now seems like vengeful malevolence to cut interest rates just weeks after the vote when it was too early to judge any real market reaction to Brexit.
By doing so he increased the plunge in the value of sterling to purely justify his own predictions of its fall, making it a selffulfilling prophecy.
The result of this ill-advised and ill-timed decision has been a dramatic rise in the cost of imported goods which has led to a spike in inflation which impacts on us all.
In his BBC Radio 5 interview this week, Rees-Mogg called Carney “one of the enemies of Brexit”.
The Bank of England Governor “shamed his role because he’s become partisan”, said the Conservative MP.
“He quite disgracefully intervened in the referendum campaign.”
This Canadian fully paid-up member of the global elite has not served the interests of Britain at all well.
With his eye on possibly standing as prime minister in his own country, he has done everything he can to stand shoulder to shoulder with the liberal international establishment and little to help this nation make a success of Brexit.
His downbeat, inaccurate predictions undermine business confidence and play well to the chorus of Remoaner media commentators who want Brexit to fail.
Then, on top of that, to cut interest rates at a time when it was not needed and to thus precipitate a cost of living crisis is nothing short of irresponsible.
Historically low interest rates were only ever intended as a temporary measure to head off recession after the economic crash of 2008.
That we are still living with them now has had an appalling effect on all our lives.
The rich got richer as they put all their cash into property in order to get a decent return, making house prices spiral upwards, out of reach of our children.
Thanks to that, we now face a generational revolt as young voters look to hardLeft Marxists such as Jeremy Corbyn to redress the balance.
It’s either that or the Tories recklessly taking on further national debt in order to build hundreds of thousands more houses.
Instead, a rise in interest rates will lower house prices and help to return rental property to the market.
No one wants to see mortgage holders suffering but a gentle rise in interest rates would help us all.
Not only would older people – who have been punished over the past decade – start to see a decent return on their hard-earned savings but the black hole in company pensions would be closed as bond yields rise.
This in return would encourage companies to stop hoarding money to cover their pension liabilities and release this capital so they can invest in expansion and employing more people.
After all we’re only talking about returning mortgage rates to a normal level and we all lived with that for years when houses prices were more reasonable.
Instead abnormally low interest rates have encouraged a culture of reckless borrowing with personal debt climbing back to unsustainable levels.
The latest cost of living crisis is mainly Carney’s fault and he needs to start cleaning up the mess with a series of gentle interest rate rises over the next few months.
Only then will we finally know if he cares more about Britain than justifying his own anti-Brexit folly.
Yet again, Jacob Rees-Mogg displays his fearless talent for pricking the pretensions of the liberal elite.
Dare I say it, bearing in mind Rees-Mogg’s recent reluctance to be considered for any role other than backbencher, this successful businessman would make a fine Chancellor.
All the better to take on a wrong-headed Bank of England Governor like Carney and steer he UK towards Brexit success.