The Great Debate UK

Could Mark Carney learn a thing or two from Luis Suarez?

Bank of England Governor Mark Carney smiles as he waits deliver a public speech "One Mission. One Bank. Promoting the good of the people of the United Kingdom" at the Cass Business School in London, March 18, 2014. REUTERS/Sang Tan/Pool

Uruguay's Luis Suarez (R) reacts after clashing with Italy's Giorgio Chiellini during their 2014 World Cup Group D soccer match at the Dunas arena in Natal June 24, 2014.  REUTERS/Tony Gentile

 

 

 

 

 

 

 

In the aftermath of Liverpool and Uruguay footballer Luis Suarez biting an opponent yet again, and with such aggression that he scarred the player’s arm and hurt his own teeth, FIFA has banned him for nine games, and psychologists are trying to justify his behaviour by saying that Suarez must have been humiliated and frustrated in his youth. I, in contrast, am asking whether Mark Carney and co. should learn to be a little more like Suarez?

Let me make this clear, I am not advocating that members of the Bank of England’s Monetary Policy Committee give each other a good bite if they disagree on policy (imagine the bite marks at the ECB if that was socially acceptable), but they should metaphorically pull a few Suarez’s from time to time.

Earlier this week was a classic example. Mark Carney was testifying to parliament on the May Inflation Report. A mere two weeks before, Carney had been rather candid at the annual Mansion House dinner, and stated that the markets were mis-pricing the potential for a rate hike. This triggered a huge market reaction, pushing GBP-USD to its highest level for 5 years. Interest rate traders wasted no time shifting their expectations for a rate rise from Q2 2015 to January 2015.

Carney would have known that his Mansion House comments would be widely reported in the press, yet, he changed his tune when he was speaking to the politicians. Rather than play up the prospect of a rate hike, as he had done a couple of weeks’ before, he talked down the chance of one, saying that his comments at Mansion House were his own personal views, and that wages were too low to hike rates.

Bank of England’s focus on growth might stir ghost of inflation

–Darren Williams is Senior European Economist at AllianceBernstein. The opinions expressed are his own.–

The Bank of England appears to have moved the goalposts. After 30 years of focusing almost exclusively on inflation, monetary policy is now being more explicitly directed toward generating faster growth and lower unemployment.

Interest rate decision day: no news is bad news

-Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own.-

Whether their problem is narcotics or alcohol or simply junk food, addicts are usually planning to give up… but not yet. In the meantime, there are always plenty of excuses for delay.

Are interest rates set to rise?

USA/Whenever he approaches a bend, an F1 driver has to make a fine judgment: brake too soon and he loses vital momentum, too late and he risks losing control altogether, with possibly fatal consequences.

For the past year, the MPC has been getting closer to the bend – the point at which it will have to raise interest rates – so, as each month passes without a touch on the brakes, the balance of risk changes as the danger of losing control of inflation increases.

Friendly Cameron and King get mix right for now

By Ian Campbell

–  The author is a Reuters Breakingviews columnist. The opinions expressed are their own –

Just in government and David Cameron’s relationships are in question. Eyebrows have been raised about the prime minister’s friendship with an Old Lady, sometimes known as the Bank of England. The affection appears reciprocated by Mervyn King, the Bank’s governor. But to think the Old Lady’s independence is compromised is probably to take things too far. The bank’s current low interest rate policy looks more than just a political favour.

Hike in interest rates a step closer

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menashysmall2- Edward Menashy is chief economist at Charles Stanley. The opinions expressed are his own. -

The Monetary Policy Committee of the Bank of England has kept its key lending rate at a record low of 0.5 percent, last reduced in March 2009 when it indicated that conventional policy had reached its limit and unorthodox measures such as quantitative easing were to be used.

Equities may now be a better bet

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menashysmall2- Edward Menashy is chief economist at Charles Stanley. The opinions expressed are his own. -

Not exactly shock and awe as the MPC keeps base rates on hold at 0.5 percent while the most recent financial surveys have been unanimous in expecting a no change decision for some time now. It was always going to be an MPC meeting to discuss whether or not to persevere with quantitative easing. The difficulty for the MPC is that it is too early to judge the effectiveness of the quantitative easing. Clearly the Bank of England would prefer to wait at least until it publishes new quarterly growth and inflation forecasts to explain how it wishes to proceed.

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