Carney charms MPs (once they get over his pay)

The next BoE governor reveals his plans for expectation management, but stays firmly conventional.

Against a background of the Bank of England's monetary policy committee deciding to keep interest rates flat at 0.5 per cent for another month — meaning it has now been four full years since the last rate change — the next governor of then Bank of England, Mark Carney, appeared before the Treasury select committee and and gave some of the first hints as to how he plans to run the country's central bank.

Of course, before he could do that, he had to justify his pay to the assembled MPs. Admittedly, Carney will be payed a lot: £480,000 a year base salary, plus a £250,000 "housing allowance", well above his predecessor Mervyn King's £305,000. But he defended his salary by pointing out that "I'm moving from one of the least expensive capital cities in the world – Ottawa – to one of the most expensive capital cities in the world," and by noting that his pay was in line with the outgoing head of the FSA, whose responsibilities are being merged with the Bank of England's.

David Ruffley MP was behind him, at least:

On the question of pay, you will be paid considerably less than recent England football managers and I think you are likely to have more success than them.

Eventually, Carney was allowed to talk about monetary policy, and revealed that, while he isn't going to be the loose-cannon central banker of our dreams — NGDP targeting and helicopter drops are out of the question — he does plan to be somewhat more aggressive than King.

In Canada, where Carney was the head of the central bank before his appointment here, there are formal reviews of the inflation target on a five-yearly timeframe. Here, by contrast, the target is — and has been since it was introduced fifteen years ago — for inflation to be within a one percentage point band of two per cent annually. MPs asked whether that target should be changed or loosened, and, while Carney did not directly offer any alternatives, he did argue that there should be that debate, albeit a "short" one.

The "high bar" that Carney thinks needs to be met before change can happen means that NGDP targeting — the idea of mandating the Bank to aim for a particular level of nominal (un-adjusted for inflation) GDP — is unlikely. He remains "far from convinced" that it could work. Similarly, while the USA has a dual mandate, requiring the Fed to target both inflation and unemployment, Carney isn't necessarily aiming for that as an end-stage for Britain either. He starts "from a position of considerable monetary stimulus to take up the slack", but believes that, for the time being, there is enough flexibility under the normal target to pull that off.

Where Carney marked the most substantial break with King was in his expressed belief that communication could be used more effectively to achieve the aims of the bank.

A huge part of monetary policy is expectations management — ensuring that people believe that the future economy is going to be certain way, and act on that belief. That's because many economic prophecies are self-fulfilling. If you tell everyone the stock market will crash, and have enough credibility that they act on it, then they will pull money out of the market and cause that very crash.

As a result, there's a huge difference between a central bank having a plan to keep interest rates low for a further two years, and a central bank saying it has a plan to keep interest rates low for a further two years. Carney understands that difference, and apparently plans to make the most of it.

No matter what happens, though, he has reiterated that he is only going to stay in charge for one five-year term, due to family commitments and a desire to get out of the high stakes world of central banking while he still can. While MPs expressed disbelief that someone could let something so prosaic as a family affect their job, Carney explained that he hoped to achieve all his goals in that span, and to make an exit "that is less newsworthy than my entrance".

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

A girl in an Ariana Grande top. Photo: Getty
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The joy of teenage girls is the heart of pop - we can't let the Manchester attack change that

What happened in Manchester feels horribly new because it targeted young girls in one of the places where young girls can be themselves to the fullest.

This morning, while the radio news talked of nothing but Manchester, my 10-year-old daughter asked me if it was still safe to go and see Adele at Wembley Stadium in July. The ticket was her big Christmas present and the printout of the order confirmation has been blu-tacked to her wall for months. She’s as excited about it as she has been excited about any event in her life, but now she’s also scared. Could this have happened to her when she saw Ed Sheeran the other week? Could it happen to her at Wembley, or anywhere else? I am sure that there are similar conversations happening across the country. Some long-awaited birthday treats will be cancelled. Red letter days erased from the calendar. Parents can allay their children’s fears (and their own), and decide to go ahead despite them, but they cannot pretend the fear isn’t there, suddenly, where it wasn’t before.

When I first started going to gigs in 1989, I never worried about not coming back. I fretted about missing the last train back to the suburbs, or not having a good view of the stage. You can feel unsafe at a gig, especially if you’re a girl in a moshpit where boys can’t keep their hands to themselves, but usually not life-or-death unsafe. Fatal crowd disasters such as Roskilde in 2000 and Cincinnati in 1979 have spurred the concert industry into making venues as safe as possible. There are sensible, practical measures you can take to avoid crushes.

Terrorism at music venues, however, is relatively new and hard to deal with. This is why the Bataclan massacre in November 2015 had such an enormous impact. There is no hierarchy of tragedy — a death due to terrorism is a death due to terrorism, whether it’s in a concert hall in Paris or a mosque in Iraq — but some tragedies are so close to home that they change the way you think. The first show I attended after the Bataclan (New Order in Brixton) was charged with a strange electricity, as defiance defeated anxiety and the rational mind silenced this new kind of fear. A few weeks later I saw Savages in Paris and it was even more intense. The venue was small and subterranean. I have never paid such close attention to the location of the exits.

Everyone has tried to reassert normality after an atrocity has felt like this: the first time they took the tube after 7/7, or went to work in New York in September 2001, or danced in Miami after the Pulse shootings, or stayed out late in Istanbul after last New Year’s Eve. In some countries the fear is never allowed to fade. What happened in Manchester feels horribly new because it targeted young girls in one of the places where young girls can be themselves to the fullest.

The joy of teenage girls is the heart of pop, and it is often misunderstood, if not patronised and dismissed. Their excitement doesn’t derive purely from fancying the star on the stage — when I saw Taylor Swift or Miley Cyrus (at the MEN arena in fact), the screaming was as intense as it is for any boy band. In fact, it’s not entirely to do with what’s happening on the stage at all. As a critic in my 40s who’s been to hundreds of shows, I may be bothered by an incoherent concept or a mid-set lull, but nobody around me is solely interested in the performance. Even shows that I’ve found disappointing have an ecstatic carnival atmosphere because a pop show is a catalyst for a great night out — one that may have been anticipated for months. The pop star is a vessel for a mess of inchoate desires and thrilling, confusing sensations (Bowie knew this) so the girls aren’t just screaming for the star; they’re screaming for themselves and for each other. They are celebrating music, of course, but also youth, friendship, the ineffable glee of the moment, life at its most unquenchable. It’s a rite of passage that should never be contaminated by even an inkling of dread.

First and foremost, I feel compassion for the victims and their friends and families. Then for the survivors, including Ariana Grande, who will be traumatised for a long time to come. But beyond those immediately affected, this atrocity will cast a long shadow across the youths of countless pop fans. Will something like this happen again? Perhaps not. Statistically, the possibility of an attack at one particular show is minuscule. Over time, the fear will subside, because it always does. My daughter is absolutely still going to see Adele, and she’ll have a whale of a time. But the knowledge that it could happen at all means a loss of innocence.

Dorian Lynskey is a journalist living in London. He blogs at:

33RevolutionsPerMinute.wordpress.com

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