“I’M GOING to where the challenges are greatest.” So declared Mark Carney when he was appointed governor of the Bank of England in November 2012. “Britain needs the very best...and in Mark Carney we have got him,” purred George Osborne, chancellor of the exchequer, at the same time. Soon after Mr Carney assumed office, Britain’s economy took off; today it soars. That suggests the world’s only glamorous central banker should congratulate himself on a successful transatlantic rescue mission when he celebrates two years in the job on July 1st. In reality, monetary policy has been mostly on autopilot. Mr Carney is still waiting for the right moment to change course.
In late 2012 the economy was sluggish. But by the time Mr Carney had crossed the Atlantic, the recovery was already under way; in the first half of 2013, while Mr Carney was readying himself for the job, GDP grew at an annualised rate of 2.5%. House prices had begun to rise and share prices had returned to their pre-crisis high.
That did not stop Mr Carney from pushing the throttle on his arrival, with “forward guidance”: a conditional promise not to raise interest...Continue reading
via Brian Rushton, Cruising, for now
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