Now Carney claims Project Fear helped to save the economy!
A DEFIANT Mark Carney tried to claim credit for Britain’s postBrexit economic rebound yesterday and rejected claims he ‘over-egged’ the risks of leaving the EU.
During heated exchanges with MPs, the Governor of the Bank of England said the chances of recession had fallen thanks to his actions since the June referendum.
And he said he was ‘absolutely serene’ about the way the central bank had behaved, despite being accused by his critics of being a leading architect of Project Fear.
Mr Carney said interest rates could even be cut again following last month’s reduction from 0.5 per cent to a new low of 0.25 per cent. But one senior MP on the Treasury Select Committee called on Mr Carney to resign – saying his credibility has been ‘permanently damaged’ by his role in the referendum campaign.
Another member of the committee compared the Bank’s Brexit warnings with ‘the apocalyptic literature of Jeremiah and Ezekiel’. Before the referendum, Mr Carney sparked outrage among Leave campaigners when he warned that quitting the Brussels club could tip the economy back into recession.
After the vote, he was then accused of trying to justify those bleak warnings by cutting interest rates and restarting the central bank’s money printing presses. Giving evidence to the committee yesterday, Mr Carney said he was ‘absolutely comfortable’ with the Bank’s actions.
The Canadian said there has already been a ‘bounce-back’ in the UK thanks in part to the ‘timely, comprehensive and concrete action’ taken by the Bank to ‘support, cushion and help the economy to adjust’.
He added: ‘The fact is that this financial system, under the oversight of the Bank of England, sailed through what was a surprise to the vast majority of financial market participants.’
And he said the Bank could cut rates again if the economy needed another boost – hammering savers in the process.
‘We could cut bank rate further if we needed to,’ Mr Carney told MPs. ‘We are very much not out of ammunition but nor are we trigger happy.’ But after the hearing, Conservative MP Jacob Rees-Mogg, a pro-Brexit member of the committee, called for Mr Carney’s head: ‘He has shown himself to be partial in a political debate when the Bank of England needs to be independent.
‘I think it is opportunistic to say the reason why the economy bounced back is because of the Bank of England. I think the truth is that the economy has appeared to do so well because the warnings of disaster were always overstated.’ At the start of the hearing in Parliament, Tory MP Andrew Tyrie, chairman of the committee, told Mr Carney there was a ‘charge sheet’ over his role in the referendum.
He said the Governor faced allegations that he ‘over-egged the warnings of the economic effect of Brexit’ and then ‘sought to justify those dire warnings made before June 23 by encouraging an over-reaction after it’.
Referring to the Bank’s warnings about the impact of Brexit, Tory MP Steve Baker said: ‘It felt like we were reading the apocalyptic literature of Jeremiah and Ezekiel.’
A vote to Leave could lead to a materially lower path for growth and a notably higher path for inflation Bank of England’s warning in May
The fact is that this financial system, under the oversight of the Bank, sailed through Mark Carney yesterday
HE is the man who waded into the political arena before the referendum, shamelessly breaking the rules of his supposedly impartial job to issue dire warnings of disaster if we dared opt for Brexit.
Yet with breath-taking effrontery, Bank of England Governor Mark Carney now has the audacity to claim credit for the economy’s resilience since the vote!
He is ‘absolutely serene’, he tells MPs, attributing last month’s recovery to the ‘extraordinary preparations’ he made to help make a success of Brexit.
How very strange. This paper does not recall Mr Carney reassuring us, amid his blood-curdling predictions of recession and unemployment, that action by the Bank would make everything all right.
On the contrary, his relentless negativity over Brexit depressed shares and the pound after the vote, before the markets woke up to the truth that the roof wasn’t about to collapse after all.
In fact, authoritative figures yesterday show the economy grew by 0.3 per cent in the three months to the end of August.
As for the Governor’s post-referendum package of interest rate cuts and moneyprinting, which has hammered savers and threatens to stoke inflation, there are strong reasons to believe this was unnecessary (or at least premature).
He is trying to have it both ways. If the economy had tanked, he would have gloated: ‘I told you so.’ Now he tells us it’s thanks to him that it hasn’t! Jet- setting former Goldman Sachs banker Mr Carney, who has saddled us with a £250,000 travel bill in three years, is earning an unfortunate reputation for wildly inaccurate forecasts. He also needs to learn to control his compulsion for politicking and self-promotion.
If not, he may be looking at a final, oneway ticket to his native Canada.