British press was in an uproar last month when Canadian Mark Carney was announced as the incoming Bank of England (BOE) governor. First time a “foreigner” has held the top job at the BOE resulted in criticism of the bank. Mr. Carney was labelled by the Sun newspaper as “Heavy Metal Fan to Run Bank of England.” Apparently a reference for Mr. Carney’s Harvard University days when he use to blast AC/DC’s Back in Black before ice hockey games.
Almost three weeks later Mr. Carney is already starting to shift thinking George Osborne has signalled for the first time that he would consider scrapping Britain’s 2 per cent inflation target in favour of a more growth-focused objective. Much needed to jump start the UK economy which is drifting into recession on the heels of austerity measures and continued headwinds from Europe.
Furthermore the chancellor praised Mark Carney for “leading international debate and opinion” on new central bank targets.
The chancellor and conservative government is now also under pressure after the S&P as it yesterday revised the outlook for UK debt rating to negative from stable. It was in consideration of “net general government debt as a percentage of GDP contining to rise till 2015…and future employment or growth shocks could pressure government finances further.” Full rationale for revised outlook is posted on S&P web-site.
Myself as a Canadian now living in the UK, I can understand the initial hesitation and reluctance of the UK people. However the lessons and experiences at the Bank of Canada which prudently helped Canadians side-step the impact of the 2008 credit crisis will be a tremendous benefit to the UK.
With global economic growth remaining fragile, the British (Scottish and Welsh also) could significantly benefit from much improved monetary policies that Mr. Carney can bring to help kick-start the UK economy. You could thank us later, eh.