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.

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Low fat, full fat: why the diet industry keeps changing its mind

A new report illustrates just how disillusioned the diet industry has become, at the expense of everyone else.

Another year, another wave of dietary fads. Most seem to surface in the summer, when new nutritional advice claims to provide the panacea to everyone’s health woes: “Eat clean get lean!” “The simple secret of intermittent fasting!” “The paleo way is the only way!” “Six weeks to a super you!”

However, despite the barrage of diet books, the expansion of nutrition research and the growth of education about healthy living, global obesity has more than doubled since 1980.

It may be that this is due to the conflicting information constantly issued from the diet industry. “Eat lots of protein – it’ll speed up your metabolism!” “Too much protein will damage your kidneys – reduce your protein intake!” “Superfoods are a vital source of antioxidants!” “Superfoods aren’t so super at all!” “Don’t snack it will make you pile on the pounds!” “You should snack – it’ll stop you from binge eating!” It’s no wonder people aren’t sure what to eat.

The UK launched its first dietary guidelines in 1994, which have since been continuously revised to form the guide now known as “The Eatwell Plate”. The dietary guidelines recommend plentiful carbohydrates “such as rice, bread, pasta and potatoes”, at least five portions of fruits and vegetables, some protein, some milk, some dairy and minimal saturated fat.

However, a recent report serves to highlight the confusion consumers face when it comes to food: it claims that the official advice on low-fat diets is outright wrong, even damaging.

Led by the National Obesity Forum and the Public Health Collaboration, the report (not peer-reviewed, it’s worth noting) attacked a host of official health proposals. It claims that “eating fat does not make you fat”, and criticises Eatwell Plate’s small fat allowance. The report also stated that saturated fats have been unfairly demonised, as there is allegedly little evidence to suggest that they cause heart disease. Meanwhile sugar consumption should be dialled down to zero, apparently, and calories shouldn’t be counted, as an abundance of them won’t cause obesity. Also, forget about the exercise - apparently a bad diet can’t be outrun, according to the report.

Professor David Haslam, chairman of the National Obesity Forum, said: “As a clinician, treating patients all day every day, I quickly realised that guidelines from on high, suggesting high-carbohydrate, low-fat diets were the universal panacea, were deeply flawed. Current efforts have failed – the proof being that obesity levels are higher than they have ever been, and show no chance of reducing despite the best efforts of government and scientists.”

Dr Aseem Malhotra, consultant cardiologist and founding member of the Public Health Collaboration reinforced this by saying the guidelines were “perhaps the biggest mistake in modern medical history, resulting in devastating consequences for public health.” Under current dietary guidelines, obesity levels have indeed increased in the UK, with nearly two-thirds of men and women overweight or obese, costing the economy more than £3bn per year.

In the face of such starkly opposed sides - both backed by seemingly reputable experts who claim all their research is based on empirical evidence - what are consumers meant to do?

The vilification of fat

In 1983, it was recommended that overall dietary fat consumption should make up only 30 per cent of total daily energy intake – 10 per cent of which, at most, should come from saturated fat.

The recommendations came from a number of research papers published at the time, which suggested a link between saturated fat intake and increased levels of LDL cholesterol – the cholesterol which has been connected to increased risk of heart disease, stroke and atherosclerosis.

An even simpler reason for the suggestions boiled down to this: fat has more calories per gram than carbohydrates – nine calories per gram versus four, to be exact. This shape to future official guidelines, and gave birth to the low-fat high-carbohydrate mantra. Fat was cemented as public enemy number one.

As a result, the fat eliminated from people’s diets was to be supplemented with an increased intake of carbohydrates. Tipping the scales in favour of carbohydrates were promises of weight loss as a result of higher fibre content, elevated levels of serotonin to aid sleep and boosts in mood from feeling fuller.

But obesity levels continued to soar, and health experts shifted their focus to the next culprit: carbs.

The low-carb era

An analysis by The American Journal of Clinical Nutrition combined the results of 21 studies and found that “saturated fat was not associated with an increased risk of coronary heart disease”. Other studies demonstrated the positive effect on testosterone levels in men from increased saturated fat intake, and have noted increased levels of triglycerides (the stuff that makes you fat) from lower fat diets.

As a result, dieticians developed a deep suspicion of carbs, and sugar in particular, and diets like the Atkins regime became more and more popular.

In part, the report by the National Obesity Forum and Public Health Collaboration uses the research that propped up these low-carb high-fat diets as a means by which to attack the general consensus surrounding healthy eating. Dr Malhotra, who led the latest report, previously worked in a pressure group called Action on Sugar – a group that has tried to get the food industry to reduce the amount of sugar added to food.

The reasoning goes something like this: guidelines encouraging greater carbohydrate consumption are oblivious to the fact that sugars constitute a vast amount of refined carbohydrates. By cranking up the sugar intake we ratchet up the risk of type 2 diabetes; this in turn could spark further health problems including obesity.

The logic seems sound, and yet obesity levels have continued to soar in the face of this research. The notion that all sugar should be avoided also ignores the fact that our brains require a significant amount of glucose for optimal functioning.

Everything in moderation

In the face of an industry that can’t make up its mind about how people should eat, it’s no wonder obesity levels have grown to epidemic proportions. So what can be done?

Professor Susan Jebb, the government’s obesity adviser, believes that the current debate needs to expand beyond the battle between carbohydrates and fat. She said: “We’re eating too many calories – if we want to tackle obesity people do need to eat fewer calories and that means less fat and less sugar.” And she’s right. If decades of research have pointed to anything assertively, it’s that calories count, and paying attention to portion sizes could take us a long way.

Both fat and carbohydrates are necessary for our bodies to function. The solution? Enjoy everything in moderation. Eat fruits without fearing fructose, don’t throw away the egg yolk, get a decent amount of protein and yes, you should have your slice of cake too.