That Mark Carney effect in full

The new Governor of the Bank of England makes sweeping changes.

It's our favourite chart, and you can really see the effect new governor Mark Carney is having on the Bank of England.

In all seriousness, though, the Bank's announcement of the meeting of the monetary policy committee (MPC) did contain a bombshell, of sorts:

The implied rise in the expected future path of Bank Rate was not warranted by the recent developments in the domestic economy.

In non-central-bank speak: "don't expect us to raise interest rates any time soon, because the economy is still in the toilet." What they're saying is almost less important than the fact that they're saying it at all, though. Interest rate decisions are normally passed down without any statement at all; we have to wait for the minutes of the MPC to be released a few weeks later to find out what was going through their heads. That pushes the statement from an explanation of their thoughts into active monetary policy in its own right. It is what's known as "forward guidance".

Monetary policy is, at heart, an expectations game. Interest rates, inflation, and even (to a lesser extent) the quantity of money matter because they change the decisions you make about how to plan for the future. If interest rates are low, you're likely to invest. If interest rates are low and likely to stay low, you're likely to invest more. If interest rates are low and the central bank is telling you they'll stay low for quite some time, well then, you may as well buy some stocks or build a bridge or something, because you aren't going to make any profit in a savings account.

Forward guidance is a very Carneyesque thing to be doing (although Mervyn King was no stranger to the concept himself), but there's two sides to the coin: making promises, and keeping them. This guidance isn't particularly controversial, merely stating what we all knew they were thinking; but it's useful to build up trust that when the Bank makes statements, they're statements you can bank on.

Update:

Fanfaronade adds to our translation. Though this metaphor is getting rather mixed now.

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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Why the Labour rebels have delayed their leadership challenge

MPs hope that Jeremy Corbyn may yet resign, while Owen Smith is competing with Angela Eagle to be the candidate.

The Eagle has hovered but not yet landed. Yesterday evening Angela Eagle's team briefed that she would launch her leadership challenge at 3pm today. A senior MP told me: "the overwhelming view of the PLP is that she is the one to unite Labour." But by this lunchtime it had become clear that Eagle wouldn't declare today.

The delay is partly due to the hope that Jeremy Corbyn may yet be persuaded to resign. Four members of his shadow cabinet - Clive Lewis, Rachel Maskell, Cat Smith and Andy McDonald - were said by sources to want the Labour leader to stand down. When they denied that this was the case, I was told: "Then they're lying to their colleagues". There is also increasing speculation that Corbyn has come close to departing. "JC was five minutes away from resigning yesterday," an insider said. "But Seumas [Milne] torpedoed the discussions he was having with Tom Watson." 

Some speak of a potential deal under which Corbyn would resign in return for a guarantee that an ally, such as John McDonnell or Lewis, would make the ballot. But others say there is not now, never has there ever been, any prospect of Corbyn departing. "The obligation he feels to his supporters is what sustains him," a senior ally told me. Corbyn's supporters, who are confident they can win a new leadership contest, were cheered by Eagle's delay. "The fact even Angela isn't sure she should be leader is telling, JC hasn't wavered once," a source said. But her supporters say she is merely waiting for him to "do the decent thing". 

Another reason for the postponement is a rival bid by Owen Smith. Like Eagle, the former shadow work and pensions secrtary is said to have collected the 51 MP/MEP nominations required to stand. Smith, who first revealed his leadership ambitions to me in an interview in January, is regarded by some as the stronger candidate. His supporters fear that Eagle's votes in favour of the Iraq war and Syria air strikes (which Smith opposed) would be fatal to her bid. 

On one point Labour MPs are agreed: there must be just one "unity candidate". But after today's delay, a challenger may not be agreed until Monday. In the meantime, the rebels' faint hope that Corbyn may depart endures. 

George Eaton is political editor of the New Statesman.