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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Jeremy Corbyn's confidence shows he knows he's safe

Even after the Copeland by-election defeat, Labour MPs believe their leader is unassailable.

A week after Tony Blair’s pro-Remain cry, Jeremy Corbyn rose to deliver a speech on “the road to Brexit”.  But it is the road to ruin that Labour MPs believe he is leading them along. The party last night became the first opposition to lose a by-election to the government since 1982. Were the Copeland cataclysm replicated across the country (and Labour traditionally underperforms at general elections), the Conservatives would win a majority of 114.

MPs believe this new nadir is not in spite of Corbyn but because of him. They blame his historic opposition to nuclear power (the seat’s major employer) and personal unpopularity for the Tories’ triumph (with the largest swing to a governing party since 1966). In his speech, Corbyn hailed Labour’s victory against Ukip in the accompanying Stoke by-election (though Paul Nuttall didn’t make it hard for them) and attributed the Copeland defeat to voters feeling “let down by the political establishment”. Yet in the Cumbrian constituency it was not a populist upstart that benefited but Theresa May’s government. Even the Prime Minister’s refusal to save local maternity services (“Babies will die,” warned the opposition) wasn’t enough to spare Labour. 

Asked by ITV journalist Chris Ship whether he had “looked in the mirror” and asked “could the problem actually be me?”, Corbyn flatly replied: “No”. He did not sound as if he was lying. “Why not?” pressed Ship. “Thank you for your question,” the leader said.

Corbyn speaks with the confidence of a man who knows that he is, for now, unassailable. In Labour’s internal conflict, it is not last night’s result that counts but last year’s leadership election. Corbyn emerged strengthened from that contest and MPs fear a similar outcome in the event of a new contest. Though activists express increasing anxiety about the party’s fortunes, most remain loyal to the leader they re-elected last summer. “We are a campaigning party, we campaign for social justice in this country,” Corbyn emphasised. Many voted for him believing, after the Tories’ surprise majority, that the 2020 election had been lost in advance. From this perspective, opposition is not the means to an end (government) but an end in itself. 

The bulk of Corbyn’s speech was a defence of the party’s decision to accept Brexit. In the post-referendum climate, Labour is being squeezed by the pro-Remain Lib Dems and the pro-Leave Tories (who have benefited from Ukip defectors). Though the party has championed amendments, such as one guaranteeing EU nationals’ rights, its commitment to vote for Article 50 regardless meant its efforts have struggled to acquire momentum. “No deal is a bad deal,” Corbyn declared of May’s threat to depart without an agreement. But that the Prime Minister can even float this possibility is a mark of Labour’s weakness.

A day may yet come when Corbyn faces a palace coup or reaches for the pearl-handled revolver. But Copeland is proof that his job is far safer than those of many of his MPs. 

George Eaton is political editor of the New Statesman.