When the Bank of England gained independence in 1997, its sponsors Ed Balls and Gordon Brown aspired to be an economic and monetary center as respected as the German Bundesbank.
In the era of the European Central Bank (ECB), the Bundesbank lives in the shadows, but nevertheless remains the voice of sound money.
No one disputes the position of German monetary policy, even if other voices of the ECB may drown it out.
Leading the way: Gov. Andrew Bailey’s well-intentioned economic interventions welcomed at the start of the pandemic
The British central bank has indeed become an economic force, and much of its work is highly reputable. But it’s hard to understand what that means.
As an inflation-fighting machine, it lost perspective after the financial crisis and the pandemic. He continued to support emergency interest rates and print money after rising inflation in 2021, despite warnings from then chief economist Andy Haldane.
Governor Andrew Bailey’s well-intentioned economic interventions were welcomed at the start of the pandemic. It was Bailey who first realized that businesses needed a guarantee scheme to prevent long-term scars in commerce.
The mission creeps into protecting jobs and making business skewed decisions. The Bank’s network of agents relaying information from the regions to the Monetary Policy Committee (MPC), which sets interest rates, is a force for good.
However, when the Bank makes its sweeping forecasts in the Monetary Policy Report, as it did last in November, it appears to be paying minimal attention to the real economy and is guided by mechanical models and forecasts.
It was in November that he made his alarming, headline-grabbing prediction that a severe contraction in real incomes would lead to a two-year recession – the longest in history.
This can still be proven (I hope not), but there have been all sorts of real world events and datasets to challenge his claim. No one fully understands how a “full employment” recession works.
What is undoubtedly true is that private sector employers, desperate to retain qualified colleagues, are finding ways to pay them more in the face of inflation. Means such as one-time payments and bonuses mean that purchasing power is maintained.
Meanwhile, surveys on our central streets and in shopping centers showed that people were going to the shops.
Instead of retreating as the Bank had predicted, the economy actually expanded 0.1% in November.
Judging by the staggering Christmas sales figures from major grocers and fashion chains, there’s no technical reason (other than the holidays) to think we should be gloomy about consumer spending or the buoyant service sector.
Worryingly, the Bank’s talk of a recession is reinforcing negative consumer and business sentiment. There is good reason to believe that this is already affecting business investment.
Bailey whined this week, reinforced by his US Federal Reserve colleague Jay Powell, that as central banks now have to deal with all sorts of social issues — from climate change to inequality — it could be a distraction. price reduction work.
Central banks really have to wonder how they misunderstood inflation so much, and have they ever thought about the consequences of printing surplus money for so long?
Should they rethink their entire forecasting approach and allow the more practical world of regional agents and real-time data to influence thinking more?
And did the “group opinion” of the Bank and former Treasury insiders at the MPC lead to poor decision making?
These are questions that the court (non-executive board of the bank) and the special committee of the treasury should consider.
The launch of ITV streaming service ITVX and a £160m content budget increase for 2023 were met with huge raspberries by the stock market last March. Shares were down 18 percent. Chief Executive Officer Carolyn McCall held her own and the streaming service, which brings together ITV Hub, ITV Hub+ and Britbox UK, went live.
ITVX has increased its streaming hours by 55% and is attracting advertisers despite industry fears that a recession could hit advertising hard. It may not be Netflix with its multi-billion dollar production budgets, but British audiences know what they like.
Credit: www.thisismoney.co.uk /