Bank of England’s Carney chill calms treasury

It's no coincidence that the economic upturn started when Mark Carney took over as Bank of England governor last July. It's the voice, stupid.

Where Mervyn King always sounded brittle and defensive, Carney has a delivery that sounds as if it's been forged out of whisky, Quaaludes and late nights listening to Joni Mitchell. Even when he was telling you that you were broke, all you would hear is this soft Canadian lilt saying: "Chill out, dude. The powder's great today. Let's go snowboarding." Or you would if you could stay awake to the end of one of his sentences.

Carney, up before the treasury select committee, was as intensely relaxed about everything as ever. Was he worried about a housing bubble? Nah, not really. "Though we have to be alert to that ­possibility," he replied, with one eye closing. Would it be a problem if businesses went bust if interest rates went up? The eye briefly reopened. "It would be an issue, not a problem."

How did he feel now that the economy was in a far better state than he had predicted? "Like, stop hassling me, man. Things are good. Just enjoy it. This forecasting thing can be really heavy shit sometimes." (In effect.) Was there any danger he might keep the cash tap turned on and interest rates low for another year just to ease quantitatively the Tories through the election? "Hell no! Do you think I'm on amphetamines?" (More or less.)

Carney's reputation for sound economic judgment as governor has been built on doing not very much and doing that slowly.

Then came Scotland. This was more of a two-eye problem. If the Scots gained independence, he said, then the head office of the Royal Bank of Scotland would have to move to London. This came as a bombshell to the committee, but for Carney it didn't seem that big a deal. It's not like it would be moving from Montreal to Vancouver, his demeanour suggested.

Danny Alexander has rather less reason to be intensely relaxed. Having spent the past four years being more Tory than the Tories, the chief secretary to the treasury is now anxious to reposition himself as a Liberal Democrat before next May's election and a possible leadership contest with Deputy Prime Minister Nick Clegg. So, he could probably have done without being left to take the plaudits for carrying out Conservative policies from Tory backbenches during treasury ­question time.

He also probably regretted saying "The British people need to know that what every party says is what it means" in answer to a question about having election promises audited. You would have thought that might be a subject the Lib Dems would choose to avoid. At least there was someone having an even worse day. Having been ticked off by the speaker for giving the wrong answer to an earlier question, Sajid Javid, the economic secretary, blundered straight into an obvious Labour set-up about the failure of the chancellor to appoint any women to the monetary policy committee. "Appointments to the MPC should always be on merit," said Javid. Whatever the right answer may have been, this was very much the wrong one.

On days like these, Javid must wonder whether it was worth taking a 98% pay cut from his job running the Singapore office of Deutsche Bank to become a politician. A weekend on the half-pipe with governor Carney would do him the world of good. – © Guardian News and Media 2014

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John Crace
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