Carney sees silver lining after Brexit hit to UK economy

[snoop1130]

Carney sees silver lining after Brexit hit to UK economy

By William Schomberg, Alessandra Galloni, Swaha Pattanaik

 

Mark Carney, Governor of the Bank of England, poses for a portrait during an interview with Reuters, in London, Britain February 13, 2020. REUTERS/Dylan Martinez

 

LONDON (Reuters) - For years, Bank of England boss Mark Carney warned of the economic risks of Britain leaving the European Union. Now that it has happened, he says there could be a silver lining in Prime Minister Boris Johnson’s plans to boost growth.

 

Speaking to Reuters a month before he ends his nearly seven-year term as BoE governor, Carney said Britain was moving to address its main economic problem - weak productivity.

 

After a thumping election win in December that paved the way for Brexit on Jan. 31, Johnson gave the green light this week to a new high-speed railway line that, according to one estimate, is likely to cost more than 100 billion pounds ($130 billion).

 

The prime minister has promised further help for regions where growth has fallen far behind London and other big cities.

 

“In an environment where everything is getting a fresh look, it’s fertile ground for taking a step back and making bigger changes than otherwise might have been made,” Carney said when asked about potential upsides for the economy from Brexit.

 

“It’s early days but there are several initiatives - the budget will be telling - that suggest that some of these opportunities are being grasped,” he said, seated at a table in his office that has been used by BoE governors for over 200 years, its leather top worn thin by use.

 

Carney was speaking on Thursday, shortly before the surprise resignation of finance minister Sajid Javid. Now, the budget statement scheduled for March 11 will given by the new chancellor of the exchequer, Rishi Sunak.

 

When asked later about the change in finance minister, the BoE declined to provide further comment.

 

Carney burst onto Britain’s financial scene from his native Canada in 2013, taking over the reins of monetary policy when the country was still struggling to throw off the hangover of the global financial crisis.

 

Three years into his term, Britain voted in a referendum to leave the EU, despite warnings from Carney and most analysts that Britain’s economy was likely to suffer as a result.

 

Carney, who angered many supporters of Brexit with his comments, has not changed his mind about that, even if Johnson says leaving the EU will unleash Britain’s potential.

 

“It’s absolutely clear in the data, whether both the survey data and the hard data, that it’s had an impact, a notable impact on investment and of course that flows through to productivity,” he said.

 

The BoE has estimated that the Brexit process has reduced productivity - a key gauge of how much an economy can grow over the longer term - by 2%.

 

A “CONCEPTUAL POSITIVE”

 

Still, Brexit could prove to be “a conceptual positive” for Britain as it finds its feet outside the EU, Carney said.

 

“It is a major reordering of our relationship not just with the European Union but our trading relationships with the rest of the world and it is prompting a reassessment of economic policy, structural economic policy in the country,” he said.

 

Carney said there were signs of a quick upturn in confidence in Britain after Johnson’s election win ended the uncertainty about whether Britain really would leave the EU on Jan. 31.

 

“We are already seeing a rebound in confidence, business confidence and to some extent a firming of consumer confidence,” he said.

 

TECHNOLOGY’S PROMISE

 

Carney said he would have been surprised if, when he swapped the Bank of Canada for the BoE in 2013, someone had told him the British economy, like much of the rest of the developed world, would still now be stuck in low growth gear.

 

The BoE last month cut its forecasts for how quickly the economy can grow without generating too much inflation to just over 1%.

 

But Carney - who will become a United Nations envoy pushing companies to acknowledge their impacts on the climate - said he was optimistic that the rewards of digital technologies would eventually be shared beyond a small group of corporate titans.

 

“I feel that there is an element of something that is fundamentally positive which is the advent of machine learning, big data, the reorganization of the economy that comes with really breakthrough technologies,” he said.

 

For now, Carney and other central bankers are watching closely for the impact of the new coronavirus which has led to shutdowns of companies and even entire cities in China.

 

Banks in Britain had been stress-tested to withstand an economic meltdown far more severe than the virus’ likely impact, and central banks might have to “look through” one or two quarters of data that reflected the outbreak, he said.

 

But policymakers were ready to act if necessary.

 

“We are watching it closely, as are other central banks and fiscal authorities, and if it necessitates some form of action, whether it’s on the macro-prudential side or the policy side, we will take it,” Carney said.

 

-- © Copyright Reuters 2020-02-14

Follow Thaivisa on LINE for breaking Thailand news and visa info

[RuamRudy]

A very interesting little thread posted by Sky News's Ed Conway on twitter this afternoon about unusual movements in UK exports' data:

 

 

[Kwasaki]

Boris kick this remainer out.

 

 

 

[Chomper Higgot]

“I feel that there is an element of something that is fundamentally positive which is the advent of machine learning, big data, the reorganization of the economy that comes with really breakthrough technologies,”

 

A revolution that is going to wipe out jobs, and this time around not just manual repetitive jobs.

[sammieuk1]

Any silver lining news at the foobanks not Coutes Mark????

[TopDeadSenter]

So Mark Carney's "steepest downturn since the war" prediction has aged rather badly. I wonder if he was incompetent or politically biased to have made such hysterical remarks? I suspect he is not incompetent.

[NanLaew]

9 minutes ago, TopDeadSenter said:

So Mark Carney's "steepest downturn since the war" prediction has aged rather badly. I wonder if he was incompetent or politically biased to have made such hysterical remarks? I suspect he is not incompetent.

His seat at the table at the World Bank, the IMF and the like is assured regardless of any questionable competencies. Just ask Lagarde at the ECB.

[soalbundy]

5 minutes ago, TopDeadSenter said:

So Mark Carney's "steepest downturn since the war" prediction has aged rather badly. I wonder if he was incompetent or politically biased to have made such hysterical remarks? I suspect he is not incompetent.

We are still in the transition phase which means the fat lady is still singing. Carney's prediction wouldn't have come from him alone, he will have a huge staff of competent financial experts who have looked at the logistics and produced a report for Carney to read out and Carney himself is no amature in the world of finanze, I doubt that a man of his stature and position would be guided by bias but instead by data.

[Chomper Higgot]

20 minutes ago, TopDeadSenter said:

So Mark Carney's "steepest downturn since the war" prediction has aged rather badly. I wonder if he was incompetent or politically biased to have made such hysterical remarks? I suspect he is not incompetent.

The UK is still trading in the EU and the BoE pumped billions into the economy to blunt the economic consequences that have occurred.

[Chomper Higgot]

Carney is unquestionably right about one thing, the UK’s productivity is appallingly poor.  

 

Good of luck taking that into a FTA with the US.

[nauseus]

Same old denialist doomsters springing into critical mode. Boringly predictable.

[JonnyF]

No surprise to see this muppet backtracking on his doomsday project fear nonsense. Only the gullible believed him anyway.

[RuamRudy]

1 hour ago, Chomper Higgot said:

Carney is unquestionably right about one thing, the UK’s productivity is appallingly poor.  

 

Good of luck taking that into a FTA with the US.

I wonder is our poor productivity more a result of the relentless attack on workers' rights rather than a critique of the efforts of the British working person. The Nasty Party has been working hard for the last 30 years to take away as many workers' safety nets as possible resulting in companies being able to hire an fire much more easily. Therefore, cheap and easily dispensable drones can be hired in lieu of proper investment in technology. 

 

 

[samran]

8 hours ago, Kwasaki said:

Boris kick this remainer out.

 

 

 

Thank god for BOE independence then. 

[RuamRudy]

8 hours ago, Kwasaki said:

Boris kick this remainer out.

 

Maybe it would be easier if remainers were required to wear some easily distinguishable mark to identify them? 

[JonnyF]

2 minutes ago, RuamRudy said:

Maybe it would be easier if remainers were required to wear some easily distinguishable mark to identify them? 

I think the current arrangement of a big L on the forehead is perfectly adequate.

[Baerboxer]

3 hours ago, Chomper Higgot said:

“I feel that there is an element of something that is fundamentally positive which is the advent of machine learning, big data, the reorganization of the economy that comes with really breakthrough technologies,”

 

A revolution that is going to wipe out jobs, and this time around not just manual repetitive jobs.

 

Something the world will have to face. As things stand these developments will accelerate the growing divide between the very wealthy and the rest. 

 

 

[Laughing Gravy]

1 hour ago, RuamRudy said:

Maybe it would be easier if remainers were required to wear some easily distinguishable mark to identify them? 

I can spot them. they are the ones with the tin pot hats on, shouting down at everyone and generally behave like Doomsday Preppers.

 

Easily identifiable.

[Laughing Gravy]

1 hour ago, JonnyF said:

I think the current arrangement of a big L on the forehead is perfectly adequate.

Is that an L for liar, loser or something else.????

[Baerboxer]

1 hour ago, RuamRudy said:

I wonder is our poor productivity more a result of the relentless attack on workers' rights rather than a critique of the efforts of the British working person. The Nasty Party has been working hard for the last 30 years to take away as many workers' safety nets as possible resulting in companies being able to hire an fire much more easily. Therefore, cheap and easily dispensable drones can be hired in lieu of proper investment in technology. 

 

 

 

The UK has unfortunately had low productivity compared to our major competitor countries for some time. Even during the Labour / Union run governments of the last 60 plus years.

 

So there doesn't appear to be the causal link you suggest, unless you have research to show otherwise. Nor is there anything to show significant moderating effects, again unless you have research.

 

Rather, it is a failure of all UK political parties to address this.

[RuamRudy]

45 minutes ago, Baerboxer said:

 

The UK has unfortunately had low productivity compared to our major competitor countries for some time. Even during the Labour / Union run governments of the last 60 plus years.

 

So there doesn't appear to be the causal link you suggest, unless you have research to show otherwise. Nor is there anything to show significant moderating effects, again unless you have research.

 

Rather, it is a failure of all UK political parties to address this.

I was just a youngster during the 70s so have no first hand knowledge of unions at the time, but a former mentor of mine told me how, when he was working at ICI in Teesside, if there was a midweek afternoon football match on, it was standard practice to call a strike for some insignificant reason, and the whole shift would decamp to the pub.

Similarly, Bill Bryson's book, Notes from a Small Island, talks about the period of the Wapping dispute with Murdoch, and how, prior to this, newspaper owners had no say in how many employees they needed to print their papers as the union decided all. 

 

These types of practice would certainly not help improve productivity figures.

 

But in the current environment, I don't know how the UK situation has changed relative to peer countries over time. but this is what the OECD has to say about the current picture:

 

"The downward pressure on wages may have allowed firms to defer investment decisions, instead meeting increased demand by hiring additional staff and, in turn, undermining the potential for investment-driven productivity growth, the report says.
 

In France, Germany and the United Kingdom, the top three sectors with the largest employment gains between 2010 and 2017 accounted for one third of total job creation but paid below average wages. Moreover, in Belgium, Finland, Italy and Spain, industries with above average labour productivity levels saw net job losses."

 

I agree with you that it is incumbent upon the government to take steps to address the situation. If not through increasing the cost (value) of an employee, what would you propose they do?

[soalbundy]

3 hours ago, JonnyF said:

No surprise to see this muppet backtracking on his doomsday project fear nonsense. Only the gullible believed him anyway.

can't see any backtracking, he made his predictions on the available data (and they haven't changed) he sees a possible silver lining as in, 'every cloud has a silver lining' you can't now assume that everything is hunky dory, far from it, weak productivity, no new markets settled, the USA wants to dominate terms (what 5G system we use, no taxation of American social media etc) the availability of financial markets to the city, free movement of workers, workers rights, environmental concerns, Fishing rights, all still up in the air, the EU, the USA have the big stick, the UK has a rusty pen knife. 

[billd766]

3 hours ago, JonnyF said:

No surprise to see this muppet backtracking on his doomsday project fear nonsense. Only the gullible believed him anyway.

None of us fick'as believed him before and during Brexit, and now it seems he is trying to change his spots.

[jesimps]

"Carney said he would have been surprised if, when he swapped the Bank of Canada for the BoE in 2013, someone had told him the British economy, like much of the rest of the developed world, would still now be stuck in low growth gear."

 

Your talking down of the country pre-Brexit is the reason it is still stuck in low growth gear, you little pillock. Be glad to see the back of you.

 

Edited February 15, 2020 by jesimps

[jesimps]

4 hours ago, soalbundy said:

We are still in the transition phase which means the fat lady is still singing. Carney's prediction wouldn't have come from him alone, he will have a huge staff of competent financial experts who have looked at the logistics and produced a report for Carney to read out and Carney himself is no amature in the world of finanze, I doubt that a man of his stature and position would be guided by bias but instead by data.

In that case they all got it wrong as well as the lead idiot.

[samran]

3 minutes ago, jesimps said:

"Carney said he would have been surprised if, when he swapped the Bank of Canada for the BoE in 2013, someone had told him the British economy, like much of the rest of the developed world, would still now be stuck in low growth gear."

 

Your talking down of the country pre-Brexit is the reason it is still stuck in low growth gear, you little pillock. Be glad to see the back of you.

 

No, most of the developed world has been stuck in low growth mode since the GFC. A few spurts here and there but nothing outstanding. 

[Magenta408]

Mike Carney! We used to call him Mike Carnage after the mess he left behind in Canada. This <deleted> is a Goldman Sachs Canuck and now he is going to the UN to start their carbon tax programmes. A right <deleted>.

[jesimps]

3 hours ago, samran said:

Thank god for BOE independence then. 

The only good thing about the BoE being independent is that a Labour chancellor can't gain control of our interest rates.

[Krataiboy]

Having failed to scupper Brexit with his unfounded doom and gloom predictions, this overpaid ($990,000 a year) Goldman Sachs cuckoo in the UK nest is clearly hoping to hang on to the job he has clearly shown himself unfit for.

 

Do yourself and the newly-liberated British people a favour, Boris, and boot out this Bilderberger and venal globalist shill.

Edited February 15, 2020 by Krataiboy

[Jare]

7 hours ago, Chomper Higgot said:

“I feel that there is an element of something that is fundamentally positive which is the advent of machine learning, big data, the reorganization of the economy that comes with really breakthrough technologies,”

 

A revolution that is going to wipe out jobs, and this time around not just manual repetitive jobs.

 

6 hours ago, Chomper Higgot said:

The UK is still trading in the EU and the BoE pumped billions into the economy to blunt the economic consequences that have occurred.

 

6 hours ago, Chomper Higgot said:

Carney is unquestionably right about one thing, the UK’s productivity is appallingly poor.  

 

Good of luck taking that into a FTA with the US.

...and are you going to substantiate these claims, or just go on and on and on about other people not substantiating theirs?