Mark Carney swings the MPC behind him

Now can he get them to support forward guidance?

The Bank of England has just released the minutes from its first Monetary Policy Committee (MPC) meeting headed by Mark Carney, showing that the governor has succeeded in swinging the whole of the committee behind him in agreeing that there should be no further quantitative easing (QE). Under Mervyn King, the split was normally 6-3 against.

The committee's meeting earlier this month resulted in no change in interest rates or QE, but did come with a statement warning people not to expect interest rate rises. That's rare for a decision to make no change, and was widely seen as a form of forward guidance. Today's minutes confirmed that, and also gave the reasoning behind keeping QE on the back burner:

An expansion of the asset purchase programme remained one means of injecting stimulus, but the Committee would be investigating other options during the month, and it was therefore sensible not to initiate an expansion at this meeting. Given the already large size of the asset purchase programme, there was merit in pursuing a mixed strategy with regards to the different policy instruments at the Committee’s disposal.

The Committee’s August response to the requirement in its remit to assess the merits of forward guidance and intermediate thresholds would shed light on both the quantum of additional stimulus required and the form it should take.

Forward guidance is the new hotness in the central bank game, for reasons I explained when earlier this month:

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.

The next thing to look forward to is the MPC's explicit assessment of forward guidance, released on 7 August.

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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What can we learn from Liam Fox's book? (Or, at least, from the first chapter)

How Liam Fox helps us face the new era, using orcs, Socrates and his knowledge of general medicine.

It’s a weird and wacky world, people, and we reach for political theory as a way of understanding the myriad linkages – ideological, emotional – between collectives of all sorts and individuals. Reach for political theory, and more importantly political history, for surely it can only be through an understanding of history that we can hope to reach into the shaken-up snow-globe and make sure the itty-bitty little snowman doesn’t get blown to buggery by the winds of change? For profundities such as the above I am indebted, latterly, to Dr Liam Fox, the erstwhile defence minister and currently Theresa May’s International Trade supremo – latterly because I’m primarily indebted to civil servants in his new bailiwick who have revealed to Private Eye that Dr Fox has insisted that they buy his 2013 globalisation excursus, Rising Tides: Facing the Challenges of a New Era, if they want to do just that.

The Eye snarked that Dr Fox’s book had sold just 1,876 copies thus far, but in fact that’s a perfectly respectable sale for a title by a contemporary politician. Ask the residents of Southmoor in Essex how they feel about instantly remaindered political books – half the village disappeared last year into a sinkhole that opened up when thousands of copies of On a Clear Day by David Blunkett, which had been buried in an adjacent landfill, reached a critical point of putrefaction. Some might describe this as ironic, others as justice. Anyway, inspired by Dr Fox’s self-conviction, and wanting to know what we can expect from the man who will be guiding our destiny as a trading nation through the savage cross-currents in the coming years, I hied me to the Amazon cloud reader to read the free sample.

Some might say this was the act of a hack who cares naught for the intellectual property of other writers, and is not prepared to put in the hard work required to understand the full compass of Dr Fox’s thinking, but my view is that the man himself will sympathise with my raw intellectual hunger. So pithily apodeictic (though simultaneously lyrical) is his own writing, that I came away from the free sample richer, wiser, and well equipped to advance his ideas to New Statesman readers – for which I believe both he, and you, will be grateful.

So, I mentioned history earlier, but let the man himself tell you how important it is to him, and us. “I am not one of those who believes that history repeats itself in the most literal sense,” Dr Fox writes, “but I do believe that the types of problems we face are repeated in time and realm.” True, it’s hard to think which “those” he might be thinking of, beyond the character of Phil Connors in Groundhog Day, but otherwise I think this is positively seer-like stuff.

Dr Fox’s use of the slightly archaic “realm” in the above may have given you pause for thought. Masterful prose writer that he is, he is softening his readers up for what comes next: a quotation from that great chronicler of humankind’s history, J R R Tolkien. And this, if I interpret it rightly, suggests that when trying to understand the motivation of jihadists, our best guide is the psychology of, um, orcs. But the history of Middle Earth alone cannot supply wisdom – neither for concerned citizens nor for the elves who lead them. For that, we require additional professional expertise, and Dr Fox is once again our man. Like the great Socrates, upon whose method he has undoubtedly based his own, Dr Fox teases out the technê of statecraft by analogy with his own illustrious medical career, in which: “The first task was to gather all the data possible about the patient and their complaint.”

Yes! How true this is. It makes me think of a hypothetical patient (or politician) whose complaint is that although he once held one of the high offices of state – one that requires of its incumbent great probity and discretion – he nonetheless attended many important meetings accompanied by an adviser who had no security clearance, and who had extensive links to lobbyists for defence contractors. Further, it makes me hypothesise that this patient (or politician), set up a “charity” to fund the activities of this “adviser”, which in turn had to shut down because of a mephitic odour, which – were I to have Dr Fox’s training – I’d probably diagnose as symptomatic of rot. It’s true that Dr Fox cautions his readers to “skip over any detail which seems excessive”, but then again: “I believe history brings some context to the subjects covered, something I think is often missed in contemporary debate.” Yes; and if it were the case that the same hypothetical patient had overclaimed the most expenses of any Tory frontbencher – including the rent on a flat used by the aforementioned special adviser – well, that would seem to provide some context for understanding how he’d function were he, once more, to hold a high office of state.

These, it seems, are the sorts of things being missed by contemporary debate. It’s as if the result of the EU referendum in June hit some sort of hard reset in the British political system: everything was turned off and turned on again, and in the process we have indeed forgotten our history, and so, like Phil Connors, we are doomed to repeat it. Thank the Lord for Dr Fox, whose civil servants will by now have absorbed their new boss’s forensic credo. When he was a general practitioner, having dealt with his own patients’ history and placed their symptoms in the right context: “The third task was to determine the course of treatment in the light of best accepted practice and the most up-to-date information available.”

Hear, hear! Given that the most up-to-date information available is that our hypothetical patient-cum-politician is still mired in the rising tide of his own bullshit, the most advisable course of treatment would appear to be euthanasia. After all, Dr Fox isn’t one of those who believes that history literally repeats itself – so a second resignation is out of the question. 

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump