Mark Carney is still trying to dismiss everything on Brexit.

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DOMINIC LAWSON: Mark Carney is still trying to dismiss everything on Brexit… He should turn to the Bank of England which he led instead

By Dominic Lawson for the Daily Mail 01:30 Jun 19, 2023, Updated 01:34 Jun 19, 2023

There are three certainties in life: death, taxes and former Bank of England Governor Mark Carney blaming Brexit for almost everything.

Last week, the Canadian, honoring us with a brief return visit, gave an interview which the newspaper concerned headlined: “Brexit is responsible for inflation, says Mark Carney”.

To be fair, he wasn’t saying Brexit was the only factor, but it was part of his tedious campaign to justify his extreme warnings in the 2016 referendum.

At the time, he threatened to pay for ignoring his advice not to vote “Leave” amid rising unemployment, recession and falling house prices. Leave aside that this is the opposite of the inflation he now claims to have predicted: none of that happened.

He also predicted that the pound would fall and, yes, it did. But as former Treasury economist Julian Jessop pointed out to me: “Even if that fall in the pound in 2016 was the result of the Leave vote, how would that affect the inflation we have in 2023?”

There are three certainties in life: death, taxes and former Bank of England Governor Mark Carney (pictured) blaming Brexit for almost everything There was an economist, Dr Andrew Sentance (pictured) ) who previously sat on the Bank’s Monetary Policy Committee (MPC), warning in 2020 that quantitative easing was a mistake

In fact, it has now become clear that “quantitative easing” (large-scale money printing), which the Bank restarted in 2020, is a central reason why, by some measures, inflation is higher in the Kingdom. United than in many other developed countries.

There was one economist, who had previously served on the Bank’s Monetary Policy Committee (MPC), warning in 2020 that this was a mistake: Dr Andrew Sentance.

Asked why the Bank did not tighten monetary policy before doing so belatedly in December 2021 (after Carney’s departure), Sentance said: ‘We haven’t seen strong dissenting voices on the MPC for many years, and it continues a pattern established since Carney became governor.

Or, as former Chancellor Norman Lamont told me yesterday: ‘I see no evidence provided by Carney for his claim that Brexit is responsible for us having higher inflation than some other countries.’ Perhaps he should instead turn to the institution for which he was responsible.

To be fair to Carney, he had left the Bank when it restarted its note-printing operation during the Covid crisis. But not mentioning this aspect in his analysis, and instead highlighting Brexit, is laughable.

This is also part of a behavior pattern. Last October, in an interview with the Financial Times, Carney said: “In 2016, the British economy was 90% of that of Germany. Now it’s less than 70 percent.

His claim that our economy shrunk 20% compared to Germany’s because of Brexit has gone viral.

Labour’s impressive Pat McFadden (pictured), aptly described Carney’s hints of when rates could rise as ‘like an unreliable boyfriend, hot day, cold day’

But it was demolished by, among others, Professor Jonathan Portes of UK think tank In A Changing Europe, who is not a Brexit supporter. He called Carney’s figure a “zombie statistic,” based on measuring the two economies at prevailing exchange rates. No respectable economist does this when assessing the relative health of economies over time.

As Professor Portes told me: “He picks a date where the pound was abnormally high against the euro (January 2016), another where the pound was much lower, and then he says we under- outperformed Germany by 20%. It’s just complete nonsense. If you look at the real annual growth rate in national currency, the UK and Germany have seen similar growth since 2016. Indeed, Germany is now in recession.

One of the reasons for our higher inflation rate may be that our consumer spending has been more buoyant than that of the Eurozone as a whole. This too has nothing to do with Brexit.

It rather amazes me at the credibility attached to what Carney says (the BBC awarded him the supreme honor of making him a Reith lecturer). As governor, his grand idea of ​​”forward guidance” on interest rates was a model of confusion.

Labour’s impressive Pat McFadden, now Shadow Chief Treasury Secretary but then a member of the Commons Treasury Select Committee, aptly described Carney’s hints of when rates might rise as “like a small unreliable friend, one hot day, one cold day”. It was in 2014.

I’m no big forecaster, but I can’t help but remind readers of what I wrote a year earlier, the week Carney took over as governor.

He had been warmly welcomed by the Treasury Select Committee, with the FT reporting that ‘MPs from all sides rushed to congratulate [him]’.

But in a column titled “We’d be wise not to trust Carney too much,” I wrote that he “is way over the horizon as the most powerful unelected official in the land. We should regard with extreme skepticism the assertion of central bankers in both America and the UK that they know when would be the right time to end the current policy of printing money.

And they didn’t. Mr Carney should give more thought to this than to reviving Brexit, even if he still cannot believe that the British have refused to respect his infinite wisdom.

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