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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I didn't expect to have to choose between a boyfriend and Judi Dench - but it happened

He told me I'd spoiled the cruise by not paying him enough attention. But what was I to do when Dame Judi Dench asked for a chat?

This happened around 20 years ago, in the days when a new boyfriend was staying at my house. One quite memorable mid-morning, the phone rang while we were in bed and it was the editor of the Times; then it rang again (when we were still in bed) and it was Dame Judi Dench. Yes, Judi Dench.

I was as surprised as anyone would be. True, I had recently written a radio monologue for her (about a wistful limpet stuck on a rock), but I hadn’t attended the recording, so I had never met her, or expected ever to hear her say, “Hello, is that Lynne Truss?” in that fabulous Dame Judi voice that only she possesses.

She said that she and her husband, Michael, were often invited to perform public readings; could I help by writing something? Stunned, I said that I would love to. She gave me her number. I hung up.

I can’t remember why I didn’t jump straight out of bed to start work on the Dame Judi project. But what I do remember is that when the phone rang yet again, we ignored it, on the grounds that, post-Judi, it could only be a disappointment.

A few months later, I was invited on a winter cruise, sailing from Colombo in Sri Lanka to Singapore. I took the boyfriend. It was only when we were changing planes at 3am that I spotted, among the other dog-tired passengers, Dame Judi with a group of friends.

Nervously, I went and said hello, what a coincidence. She said that we must talk. Then the holiday began and the boyfriend and I had a wonderful time. We met nice people and enjoyed the ship, although we consistently failed to identify our allotted muster station.

At the end of ten days, we were sitting on deck at Singapore, when I said, “Well, wasn’t that lovely?”

The boyfriend took me aback by saying, “Actually, glad you asked. No, it wasn’t.” I had spoiled the whole experience, he said, by continually talking to other people when I should have been talking to him.

I was very upset. All this time, he’d been unhappy? Casting my mind back, I realised it was true that I had made friends on board (and he hadn’t); also, at dinner, I had openly talked to the person sitting beside me, because I thought you were supposed to.

And now I stood accused of cruise-ruining! “I’ll get us some tea,” I said. “Oh, yes?” he fumed. “You’ll be gone for an hour, as usual.” And I said “No, I won’t. I promise.”

And so I went inside, wiping away my tears, and someone started chatting to me and I squeaked, “Can’t stop.” After that, I just slalomed through the throng with my head down.

Then, as I re-emerged into the sunlight with a prompt, relationship-saving cup and saucer in each hand, there was Judi Dench, and she said, “Shall we have our little chat now?” 

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad