Jacob Rees Mogg’s brutal analysis of Bank of England’s gloomy forecast revealed

Jacob Rees Mogg’s brutal analysis of Bank of England’s gloomy forecast revealed

Mark Carney’s leaving present from the Bank of England was a bronze casting of part of its Threadneedle Street building costing £4,044. His departure after more than six years as governor was overshadowed by the coronavirus crisis, meaning that all the events to mark the end of his tenure were canceled. When Mr Carney’s predecessor Lord Mervyn King stepped down in 2013, he reportedly received £13,000 worth of presents, including a painting of himself, a silver napkin ring and a £2,505 bust of German politician and writer Johann Wolfgang von Goethe.

Three events, costing more than £10,000, were also held.

Mr Carney’s departure from the BoE at midnight on March 15 was far from quiet, though.

Four days earlier, he and fellow policy makers announced an emergency cut in interest rates, and, in his final hours in the role, Mr Carney took part in a coordinated action with other major central banks to ensure money kept flowing through the financial system.

As the new governor, Andrew Bailey, prepares to face one of the biggest economic challenges in history, unearthed reports shed light on Mr Carney’s term of office, during which he was actively involved in the Brexit debate.

Throughout the campaign to leave the European Union in 2016, Mr Carney and the Bank of England issued multiple warnings and forecasts that have proven to be wrong or grossly exaggerated.

Eurosceptic Tory MP and now Leader of the House of Commons Jacob Rees-Mogg called for the top economist to resign over his warnings before the 2016 EU referendum.

According to a throwback report by The Telegraph, in May 2016, Mr Rees-Mogg called the BoE a “creature of the Government” and expressed concerns that the Bank had succumbed to pressure from the then Chancellor George Osborne to highlight the risks of a Brexit and downplay the potential benefits of a vote to leave.

He accused Mr Carney of becoming “politically involved”.

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At a previous Treasury select committee hearing two months before, Mr Rees-Mogg had also hit out at Mr Carney for jeopardising the bank’s reputation for “Olympian detachment” by emphasising the pros but not the cons of EU membership.

This time the MP for North East Somerset and Brexit campaigner said the Bank of England was not in the habit of commenting on opposition economic policy during a general election campaign, so should not comment on the effects of a UK departure from the EU during the referendum campaign.

Mr Carney rejected the analogy, saying: “We have a responsibility to discharge our remit and we have a wider responsibility to the British people, who don’t want risks kept from them.

“To suggest otherwise is to try to undermine that.”

He said a general election involved many political parties and could result in coalition governments.

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He added that a referendum presented a single clear issue whereas manifesto pledges covered many topics and could take years to implement.

The Bank of England had given a stark warning that a vote to leave the EU could have pushed the economy into recession.

The report said the economy had already begun to suffer the effects of the uncertainty surrounding the referendum outcome, pushing down the value of sterling and discouraging commercial property investment in the UK.

His reports have since been proven wrong and even Bank of England chief economist Andrew Haldane admitted that the economics profession was in “crisis” after making misjudgments about the impact of Brexit.

Not only did a recession not take place, their prediction that the economy would stagnate in the second half of 2016 was incorrect, as it grew 0.6 percent in the third quarter.

Published at Fri, 22 May 2020 13:22:00 +0000