Governor Carney must not put politics back in banking

Bankers are seldom at the top of anyone’s list of favourite people. And the financial crash of 2008 and all that followed only served to lower them still further in the estimation of many people. But Bank of England governor Mark Carney is working hard, it seems, to become even less popular than is the norm for the folk who manage our money – or fail to.

He infuriated Brexit supporters who, don’t forget, make up a majority in the country, with dire warnings about the economic devastation that would swiftly follow any vote to leave the European Union. It failed to come to pass. And he has angered those who dislike Theresa May’s Brexit deal by suggesting, in a doomladened report out this week, of even more chaos on the financial front if the deal doesn’t go through and Britain leaves the EU without one.

Mr Carney has robustly defended his predictions and denied allegations of playing politics to scare people because he and the bank want a Brexit that keeps the UK as closely allied as possible to the EU. But that is most certainly the conclusion many people have drawn from his reports and his speeches and interviews. He also tried to defuse the criticism by pointing out his gloomy warnings represented “a scenario” rather than a prediction. Yet the fine distinction might have been lost on some people.

Now, to add to the controversy, comes news that the Bank of England threw a summer party for staff and their families at a cost just short of £100,000. Add to that details of Mr Carney’s expenses between March and May – a cool £50,000 – and you have a case building that says the governor of the Bank of England, who agreed to extend his time running the institution to see Britain through Brexit, is proving a divisive influence in the country, already riven by deep differences.

When Gordon Brown was Chancellor in the last Labour government, he famously gave independence to the Bank of England, taking politics out of the important business of setting interest rates and handing it to the nine-person Monetary Policy Committee. That was a sensible move and has almost certainly been one of the reasons we have had relative stable – and very low – interest rates for much of the 20 years since that decision. But Mr Carney needs to be careful not to put the politics back into the UK’s central banking system through statements that can so easily be interpreted as political. His intentions may be to simply offer unbiased advice. But it has to look like it.

On this day

Plastic pollution on beaches, as seen above, has long been a cause for concern affecting wildlife. Now researchers have found humans too are affected