Time to heal the divisions

MARK Carney looked as though he was itching to say ‘I told you so’ about Brexit’s so-called bloodbath when he presented the latest Financial Stability report at the Bank of england yesterday.

Watching Carney talk about the great ‘uncertainties and challenges’ unleashed by Brexit, there were moments when the Don Draper lookalike Canadian banker appeared to be enjoying himself a little too much.

Wisely, Carney kept his counsel, just. For there are many who are convinced the governor’s warnings about the impact of Brexit ahead of the EU vote stoked up the very market volatility which he is now trying to calm.

Indeed, Conservative leadership hopeful andrea leadsom wants him to appear before the Treasury Select Committee to explain what she describes as his betrayal of the Bank’s independence and his ‘one-sided and biased’ forecasts which caused the mayhem.

It’s impossible to know what effect Carney’s warnings over Brexit had on the markets; that’s for the historians. But in the short-term, the measures announced to stabilise the banks and ease the flow of lending should help boost confidence. The banks are being allowed to relax their countercyclical buffers and release up to £5.7bn of capital, thus allowing them to increase lending to households and businesses by up to £150bn.

This is a U-turn on policy – the Bank had only started to implement these buffers at the start of the year. But relaxing the buffers is the right thing to do in times of stress, and the reason they are there. The banks are still holding £130bn more capital than they were before the 2008 crisis.

at least Carney had the honesty to admit that the outlook for the UK – and world economy – had been wobbly since the beginning of the year, well before Brexit fears took hold.

You only have to look at figures from the world’s biggest ship broker to see how the shipping industry is being battered by weak global trade and to low bond yields around the world to know the global economy is suffering.

The same story is told by the Baltic Dry Index, by far the smartest barometer to what’s happening in the bowels of the economy because it measures the cost of shipping raw materials such as coal, iron ore and grain. The index has been down to new lows for many months but people have been so obsessed by Brexit they took their eye off the numbers.

So what we are experiencing is a doublewhammy; fragile nerves in the UK as seen by aviva and m&G pulling two property funds because of the short-term Brexit effect but also worries about the global economy which the recent vote has crystallised but not caused.

That’s why it is so important that the Government moves to quell the sense of panic which has led to such deep rifts in the UK and on the continent.

But it is going to need much more than Carney’s smooth oiling.

There’s only one man who can try to fill the political vacuum he created, and that’s the Prime minister, the one who got us into this mess by calling the referendum.

David Cameron should call an emergency EU special session with his top european peers, such as angela merkel and Francois Hollande and others, for an old-fashioned handshake and photoshoot in one of the EU capitals, if not here in london. Corny maybe, but symbolic, and this would finally show some statesman-like qualities before he goes off to ‘chillax’ permanently.

What better way to show that we want amicable and mutually advantageous trade negotiations? most pertinently, better than ever diplomatic relations which we will maintain through nato membership as well as international groups such as the G20. even Germany’s leading employers group, the BDI, has warned the EU against punishing us; they know we could punish them too. let’s start by offering all EU citizens full rights to stay here.

as JFK said, never negotiate out of fear but never fear to negotiate.

Bright spots in the gloom

TEAR away the gloom and you’ll see that things are not doing that badly.

Housebuilder Persimmon says sales are well ahead of last year and that Brexit has so far had no impact on business. others say the same, despite the collapse in share prices.

A rival housebuilder tells me he has bid against five others for big new building schemes across the country, while architects say more expressions of interest in new homes have come through the door in the past week than over the past six months.

The number of start-ups in the UK are at a record 3.7m, with 53,000 new companies registered in may alone. These are the companies that will provide future jobs.

ask teenagers what they want to do and most say to run their own business; the spirit of innovation has never been brighter.

But going it alone is not easy. Investor and author Patrick MCGINNIS has a better idea. In his new book, The 10% entrepreneur: live Your Startup Dream Without Quitting Your Day Job, he suggests we all have a go but to devote only part of our time in case it doesn’t work out. We can try but we can’t all be the next Steve Jobs.

ALEX BRUMMER IS AWAY