Editor’s Notes: The Bank of England must protect its independence
Former chair of the US Federal Reserve Janet Yellen once said “the principle that a central bank should be independent from the government is unassailable.” Donald Trump probably thinks unassailable means you can’t sell it, but even if he understood Yellan’s point he seems determined to ignore it.
His broadsides against Fed policy are quite remarkable, and though (thankfully) he cannot take the levers of monetary policy his attacks on Yellan’s successor have made central bank policy a political issue. Trump probably looks at Turkey’s President Erdogan, who installed his son-in-law as head of the central bank, with admiration and envy. The US President will have to settle with making his own son-in-law a senior White House adviser.
Here in the UK, the Bank of England has found itself at the centre of the Brexit debate. Critics of governor Mark Carney accuse him of being a stooge of the Remain campaign and an arm of the Treasury’s so-called Project Fear. This characterisation is grotesquely unfair. Last week’s Bank of England stress-testing exercise (where the soundness of UK banks is tested against a Brexit-related horror scenario) was seized upon by Brexiters as an outrageous political intervention and was hailed by Remainers as an infallible prediction of what is to come.
Both sides were wrong, as the Bank attempted (belatedly) to make clear amid the ensuing row. The Bank is mandated to carry out such scenario planning, complete with lurid hypotheticals, and has been quietly doing so for many years. Only Brexit has brought what is otherwise a little-noticed technical exercise into the political spotlight. When the Bank has weighed in on Brexit issues, it has largely been at the request (or insistence) of MPs – often with their own agenda.
Our politicians may not be as overt as Trump in seeking to use the central bank for their own ends, but any effort to lure Threadneedle Street into Westminster’s political sphere should be fiercely resisted – not least by the governor himself.
Teaching old dogs basic manners
Up until recently the weirdest thing about Ted Baker founder Ray Kelvin was that he refuses to have his face photographed. Now staff are alleging that he’s spent years demanding (long) hugs from employees, creeping up behind them to kiss their necks. But while some in business behave as if the last 30 years didn’t happen, others are struggling to cope with a new culture.
Bloomberg interviewed dozens of senior Wall Street men who claim to be terrified of the #MeToo movement. Some won’t take female colleagues to dinner, others avoid being alone in a room with them. One male exec said he wouldn’t even share an elevator with a woman. As employment lawyer Stephen Zweig says, “those men are going to back out of a sexual harassment complaint and right into a sex discrimination complaint.” It really shouldn’t be difficult to walk the line between inappropriate behaviour and cutting off contact with women all together. One exec’s conclusion? “Just try not to be an asshole.”
We know the end… now, the means
MPs may be tearing strips off each other over what kind of Brexit to settle for but in the real world people seem to have a good idea of what kind of country we should be once this is all settled.
According to pollsters ComRes, “the country is split down the middle over almost every aspect of Brexit, with one notable exception: two thirds of voters say that when Brexit is complete, the UK should try to become the lowest tax, business-friendliest country in Europe.” Encouragingly, this view is backed by a majority of all age groups and political affiliations.
Podcast priest
Can you be friends with people who hold the polar opposite political view to your own? John McDonnell thinks not, saying he could never be friends with a Tory. Obviously, and thankfully, he’s in a minority.
My good friend Giles Fraser – with whom I disagree on very nearly everything – has launched a new podcast called Confessions, where he has illuminating and good-natured debate with people who don’t agree with him. Frankly, it’s a tonic in these testing times. Check it out.