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Bank of England governor denies being politically biased over Brexit - live updates Bank of England governor denies being politically biased over Brexit - live updates
(35 minutes later)
1.55pm BST
13:55
The AFP newswire are tweeting photos from today’s clashes in Brussels:
La police fait usage de canons à eau lors d'incidents en marge de la manifestation de Bruxelles #AFP pic.twitter.com/Q4iUY1ES84
La police continue à refouler les manifestants à Bruxelles #AFP pic.twitter.com/nxpFDgoNWI
They report:
Belgian police fired water-cannon during clashes with protesters at a huge demonstration in Brussels on Tuesday against the centre-right government’s austerity measures, AFP journalists said.
A group of around 100 masked protesters broke away from the peaceful main rally of around 60,000 people in the Belgian capital and started hurling objects and firecrackers at riot police, they said.
Officers then drove them back with jets of water from three cannon.
Tuesday’s protest is supposed to kick off months of planned demonstrations and national strikes led by trade unions against the policies of Prime Minister Charles Michel’s government.
1.52pm BST
13:52
Anti-austerity protesters clash with police in Brussels
Clashes are breaking out in the Belgium capital, as an anti-austerity demonstration turns violent.
Local media are reporting that riot police are using water cannon on protesters; just as eurozone finance ministers meet to discuss Greece’s bailout.
Today’s protests are organised by Belgium’s unions, to oppose the government’s cost-cutting measures and employment reforms.
The demonstrations had started peacefully:
But some protesters then began throwing rocks at the police....
....prompting the water cannons to be deployed.
1.40pm BST
13:40
Eurozone ministers meet in Brussels to discuss Greece
Meanwhile in Brussels, eurozone finance ministers have been gathering for today’s Eurogroup meeting.
As explained back in the introduction, we had expected ministers to sign off on a €11bn bailout payment for Greece.
But, in a worrying sign, Slovakia’s finance minister has warned that the meeting will be difficult - and could last all night!
Peter Kažimer appears to be pushing for a deal on Greece’s loans today, but not on the sticky issue of debt relief which is dividing the country’s creditors.
I’m afraid we will spend the night together. #Greece #Eurogroup #eurozone #IMF
This #Eurogroup is not going to be an easy one. Many things remain unresolved. #eurozone #Greece
Most important thing is to conclude review & agree tranche - give #Greece breathing space. We don’t need another liquidity crisis. #eurozone
We believe that debt-relief talks & financial participation of International Monetary Fund can wait for later stage. #IMF #Greece #eurozone
1.37pm BST
13:37
Cambridge lecturer Finbarr Livesey has helpfully tweeted the timings of the best moments of today’s hearing:
Carney reacts to qns of political involvement and influence of Goldman Sachs at 10:35 and 11:41 in Treasury Cmmt https://t.co/Fo4elKkFqG
1.35pm BST
13:35
Here’s some reaction to Mark Carney’s appearance at parliament today, from Calum Bennie, savings expert at Scottish Friendly:
“Today’s grilling of Mark Carney by the Treasury Select Committee has only helped fuel the speculation on the impact a Brexit would have on the UK economy.
“The build-up to the EU referendum appears to be having a significant impact on the economy as sterling has been incredibly volatile, while GDP and inflation have slowed are slowing.
“Mr Carney didn’t exactly offer savers much ground for optimism today as he merely said the next move in interest rates would ‘probably’ be up if there is a vote to remain, while a Brexit would mean there is less chance of a rate rise. Once again savers are left wondering how long rates will continue at rock bottom, potentially eroding the value of their cash.
“Savers should heed this warning from the Governor and look to the long term returns stocks and shares ISAs can offer, though risk is attached.”
1.27pm BST
13:27
Lunchtime summary: Carney faces his Brexit critics
That was a livelier morning than expected. Here’s a quick recap.
The governor of the Bank of England has fought off criticism following his warning that Britain’s economy would suffer if the public vote to leave the EU.
Mark Carney insisted that the Bank was right to outline its concerns, saying:
By our actions, and comments, we have made it more likely that we’ll bring inflation back to target, whatever the outcome of the referendum, sooner and more sustainably.
Carney also warned that the financial markets could have a “Pavlovian” reaction to the EU referendum vote.
If Britain chooses to Brexit on June 23, then it would have a negative impact on growth and the pound, and push inflation up, he argued.
It’s important not just for those in financial markets to understand that, but it’s important also to (be) straight with the British people about that.
But Conservative MP Jacob Rees-Mogg accused the governor of peddling government propaganda.
In one of the more ill-tempered exchanges seen recently, Rees-Mogg argued that the Bank had broken its own rules on independence, and damaged its reputation.
Rees-Mogg displaying dignity of a losing manager who claims referee is biased by accusing Carney of "supporting one side in the campaign".
And fellow Tory Steve Baker appeared to shock Carney, by asking him to deny that he was secretly working for Goldman Sachs.
Carney said he was shocked that such a thing could even be suggested.
Carney asked if Goldman Sachs leaned on him over #Brexit: "I categorically refute that and am stunned."
Carney was supported by three other top officials. Deputy governor Ben Broadbent, and external MPC members Martin Weale and Gertjan Vleighe, said they shared the governor’s concerns.
And the governor also revealed that he had an early peek at the Brexit paper produced by the Treasury yesterday, over breakfast with the chancellor.
Before the session began, we learned that Britain’s financial position was worse than thought. The UK was forced to borrow £4bn more than forecast in the 2015-16 financial year, in a blow to George Osborne.
But every challenge is also an opportunity -- in this case, an opportunity to warn about Brexit fears....
Today's @ONS stats show public borrowing at £76.0bn in 2015/16 - down£15.7bn on 2014/15. Our spokesperson response: pic.twitter.com/2k5eRIrB3N
Updated
at 1.35pm BST
1.00pm BST1.00pm BST
13:0013:00
Andrew Tyrie has returned from his little chin-wag with Jacob Rees-Mogg, to wrap up the session.Andrew Tyrie has returned from his little chin-wag with Jacob Rees-Mogg, to wrap up the session.
He thanks Martin Weale for his work at the Bank of England, as this could be his final appearance before the committee. Tyrie cites Weale’s “independence of mind” (which included several lonely, hawkish votes to raise interest rates).He thanks Martin Weale for his work at the Bank of England, as this could be his final appearance before the committee. Tyrie cites Weale’s “independence of mind” (which included several lonely, hawkish votes to raise interest rates).
Tyrie then hints that Weale might have another job lined up....Tyrie then hints that Weale might have another job lined up....
We’re very grateful for your public service, and we hope it’s not the last.We’re very grateful for your public service, and we hope it’s not the last.
Weale keeps a straight face.Weale keeps a straight face.
And committee chairman Tyrie can’t resist causing some mischief. He then picks up a copy of the Financial Times, which reports that governor Carney is the most trusted foreigner, ahead of German chancellor Angela Merkel or the US president.And committee chairman Tyrie can’t resist causing some mischief. He then picks up a copy of the Financial Times, which reports that governor Carney is the most trusted foreigner, ahead of German chancellor Angela Merkel or the US president.
Q: What did Carney make of this, as he enjoyed his porridge, or ‘whatever you have in the morning, when you’re not having breakfast with the chancellor’?Q: What did Carney make of this, as he enjoyed his porridge, or ‘whatever you have in the morning, when you’re not having breakfast with the chancellor’?
Carney says that the committee had to consider the impact of the EU referendum, because of the Bank’s mandate.Carney says that the committee had to consider the impact of the EU referendum, because of the Bank’s mandate.
And he jokes that he assumes Tyrie won’t be questioning everyone else on that list.And he jokes that he assumes Tyrie won’t be questioning everyone else on that list.
Tyrie then suggests that IMF Christine Lagarde could “drift by” the committee in a few weeks time, “if she does decide to put both feet in it”. Get the popcorn ready....Tyrie then suggests that IMF Christine Lagarde could “drift by” the committee in a few weeks time, “if she does decide to put both feet in it”. Get the popcorn ready....
UpdatedUpdated
at 1.07pm BSTat 1.07pm BST
12.44pm BST12.44pm BST
12:4412:44
Back in the committee room, Scottish Nationalist MP George Kerevan asks about the Banks medium-term view of the UK economy.Back in the committee room, Scottish Nationalist MP George Kerevan asks about the Banks medium-term view of the UK economy.
Mark Carney says that growth has slowed from the high days of 2013, when GDP was expanding by around 3% per year.Mark Carney says that growth has slowed from the high days of 2013, when GDP was expanding by around 3% per year.
Now, though, it has dropped to around 1%.Now, though, it has dropped to around 1%.
Stripping out the referendum effect.... the bigger picture is that growth will move in line with supply growth, which is weaker than it was. So once the uncertainty effect of the Brexit vote fades, the Bank expects growth to return to around 2.25%, Mark Carney concludes.Stripping out the referendum effect.... the bigger picture is that growth will move in line with supply growth, which is weaker than it was. So once the uncertainty effect of the Brexit vote fades, the Bank expects growth to return to around 2.25%, Mark Carney concludes.
12.35pm BST12.35pm BST
12:3512:35
Watch Carney vs Rees-Mogg hereWatch Carney vs Rees-Mogg here
Get a sponge and a towel, folks -- here’s the moment when the gloves came off between Mark Carney and Jacob Rees-Mogg.Get a sponge and a towel, folks -- here’s the moment when the gloves came off between Mark Carney and Jacob Rees-Mogg.
Watch the moment Mark Carney clashed with #Brexit campaigner Jacob Rees-Mogg over neutrality https://t.co/Udkxg3F0oC https://t.co/6f3cLqUHLmWatch the moment Mark Carney clashed with #Brexit campaigner Jacob Rees-Mogg over neutrality https://t.co/Udkxg3F0oC https://t.co/6f3cLqUHLm
Bloomberg’s Jill Ward sums it up:Bloomberg’s Jill Ward sums it up:
Mark Carney displayed flashes of anger at his chief pro-Brexit tormentor on Parliament’s Treasury Committee in his most robust defense yet of the Bank of England’s comments on the European Union vote.Mark Carney displayed flashes of anger at his chief pro-Brexit tormentor on Parliament’s Treasury Committee in his most robust defense yet of the Bank of England’s comments on the European Union vote.
It “may be inconvenient, but by our actions, and comments, we have made it more likely that we’ll bring inflation back to target, whatever the outcome of the referendum, sooner and more sustainably,” the governor told Jacob Rees-Mogg, the lawmaker who called this month for him to be fired. “That’s our contribution to a better economic outcome for the British people, and for you to suggest otherwise is to try and undermine that.”It “may be inconvenient, but by our actions, and comments, we have made it more likely that we’ll bring inflation back to target, whatever the outcome of the referendum, sooner and more sustainably,” the governor told Jacob Rees-Mogg, the lawmaker who called this month for him to be fired. “That’s our contribution to a better economic outcome for the British people, and for you to suggest otherwise is to try and undermine that.”
More highlights earlier in this blog....More highlights earlier in this blog....
12.27pm BST12.27pm BST
12:2712:27
The committee turns to the issue of Britain’s current account deficit.The committee turns to the issue of Britain’s current account deficit.
Mark Carney says there would be a ‘necessary’ rebalancing of sterling (a fall, basically), if Britain chose to leave the EU.Mark Carney says there would be a ‘necessary’ rebalancing of sterling (a fall, basically), if Britain chose to leave the EU.
And that would have an import on exporters, meaning the domestic sector would increase relative to the export sector (ie, Britain would sell less overseas, at least for a while).And that would have an import on exporters, meaning the domestic sector would increase relative to the export sector (ie, Britain would sell less overseas, at least for a while).
However, Carney insists that talk of a “sterling crisis” is overdone.However, Carney insists that talk of a “sterling crisis” is overdone.
12.23pm BST12.23pm BST
12:2312:23
Today’s Telegraph cartoon will amuse those who take government Brexit warnings with lashings of salt.Today’s Telegraph cartoon will amuse those who take government Brexit warnings with lashings of salt.
pic.twitter.com/Cx9FtqV4P0pic.twitter.com/Cx9FtqV4P0
UpdatedUpdated
at 12.24pm BSTat 12.24pm BST
12.21pm BST12.21pm BST
12:2112:21
The committee then turn to the weapons available to the Bank to stimulate the economy.The committee then turn to the weapons available to the Bank to stimulate the economy.
MPC member Gertjan Vleighe says he believes another round of quantitative easing (buying bonds from banks with newly created money) would still be effective. And there is still room to cut bank rate.MPC member Gertjan Vleighe says he believes another round of quantitative easing (buying bonds from banks with newly created money) would still be effective. And there is still room to cut bank rate.
Jacob Rees-Mogg then gets up and leaves the room, with a polite nod to the witnesses. Committee chairman Andrew Tyrie then hops up and follows him...... #curious....Jacob Rees-Mogg then gets up and leaves the room, with a polite nod to the witnesses. Committee chairman Andrew Tyrie then hops up and follows him...... #curious....
12.07pm BST12.07pm BST
12:0712:07
Carney denies being influenced by Goldman SachsCarney denies being influenced by Goldman Sachs
Steve Baker MP then leaves Mark Carney briefly speechless, by asking him to refute the suggestion that Goldman Sachs have pushed him into the Brexit debate.Steve Baker MP then leaves Mark Carney briefly speechless, by asking him to refute the suggestion that Goldman Sachs have pushed him into the Brexit debate.
Baker tells the Bank governor that he is asking ‘in the spirit of goodwill’ (!!)....Baker tells the Bank governor that he is asking ‘in the spirit of goodwill’ (!!)....
We know that Goldman Sachs has been a donor to the Remain campaign, you are a former managing director of Goldman Sachs.We know that Goldman Sachs has been a donor to the Remain campaign, you are a former managing director of Goldman Sachs.
Can I just give you the opportunity to refute any suggestion that Goldman Sachs may have put pressure on you to take a view?Can I just give you the opportunity to refute any suggestion that Goldman Sachs may have put pressure on you to take a view?
“Wow....”, replies Carney, seemingly at a loss for words.“Wow....”, replies Carney, seemingly at a loss for words.
Baker: It’s not an allegation - it’s an opportunity to refute it.Baker: It’s not an allegation - it’s an opportunity to refute it.
Carney refutes it with gusto:Carney refutes it with gusto:
Yes, I refute it categorically... and am stunned to ever have it raised.Yes, I refute it categorically... and am stunned to ever have it raised.
That’s a pretty remarkable jibe at the credibility of one of the world’s top central bankers -- but one which conspiracy theorists will like to hear aired....That’s a pretty remarkable jibe at the credibility of one of the world’s top central bankers -- but one which conspiracy theorists will like to hear aired....
.@SteveBakerHW "Can I give you the opportunity to refute claim Goldman Sachs put pressure on you?"Mark Carney: "Wow. I am stunned.".@SteveBakerHW "Can I give you the opportunity to refute claim Goldman Sachs put pressure on you?"Mark Carney: "Wow. I am stunned."
UpdatedUpdated
at 12.08pm BSTat 12.08pm BST
11.58am BST11.58am BST
11:5811:58
Q: Why do the Bank’s latest graphs show uncertainty over UK assets falling, just as the EU referendum reaches its height, asks Steve Baker.Q: Why do the Bank’s latest graphs show uncertainty over UK assets falling, just as the EU referendum reaches its height, asks Steve Baker.
Policymaker Martin Weale suggests that it is tracking the support for the Remain campaign.Policymaker Martin Weale suggests that it is tracking the support for the Remain campaign.
11.55am BST11.55am BST
11:5511:55
Steve Baker then turns to the Bank’s [not unblemished] track record on forecastingSteve Baker then turns to the Bank’s [not unblemished] track record on forecasting
You said that interest rates might rise when unemployment fell to 7%, but they didn’t. Then you said they might rise once real wages went up, but they didn’t. Then you suggested rate could go up at the turn of 2016. They didn’t. So....You said that interest rates might rise when unemployment fell to 7%, but they didn’t. Then you said they might rise once real wages went up, but they didn’t. Then you suggested rate could go up at the turn of 2016. They didn’t. So....
Q: If the bank can’t forecast its own actions, why should we trust your forecasts? You didn’t even predict the halving of the oil price.Q: If the bank can’t forecast its own actions, why should we trust your forecasts? You didn’t even predict the halving of the oil price.
Deputy governor Ben Broadbent says no-one predicted that oil would fall so sharply. Financial markets make their best guess about these moves.Deputy governor Ben Broadbent says no-one predicted that oil would fall so sharply. Financial markets make their best guess about these moves.
Q: Well, you’ve just proved the impossibility of making major economic predictions (such as the impact of Brexit)Q: Well, you’ve just proved the impossibility of making major economic predictions (such as the impact of Brexit)
That’s a false dichotomy, Broadbent replies. You can’t say that forecasting is impossible, just because you can’t predict everything.That’s a false dichotomy, Broadbent replies. You can’t say that forecasting is impossible, just because you can’t predict everything.
Just because the future is uncertain doesn’t mean that forecasting is useless, he adds.Just because the future is uncertain doesn’t mean that forecasting is useless, he adds.
[This is an example of what Sky’s Faisal Islam yesterday called the ‘pizza analogy’:][This is an example of what Sky’s Faisal Islam yesterday called the ‘pizza analogy’:]
That's pizza analogy - cant predict what you will weigh in a year or 20 years..CAn predict if you eat a pizza every hour -fatter than if notThat's pizza analogy - cant predict what you will weigh in a year or 20 years..CAn predict if you eat a pizza every hour -fatter than if not
11.46am BST11.46am BST
11:4611:46
Steve Baker MP goes next, and reduces Mark Carney to giggles.Steve Baker MP goes next, and reduces Mark Carney to giggles.
Baker, another pro-Brexit MP, tells the Bank of England’s top brass that he positively rejects the idea that they are wicked conspirators.Baker, another pro-Brexit MP, tells the Bank of England’s top brass that he positively rejects the idea that they are wicked conspirators.
Instead....Instead....
I choose to believe your wholesale innocence, completely unsullied by the grubby politics of this referendum matter. As it happens I think you’re just wrong....I choose to believe your wholesale innocence, completely unsullied by the grubby politics of this referendum matter. As it happens I think you’re just wrong....
Baker also invites Carney to the Annual Hayek Memorial Lecture held by the IEA thinktank on 8 June, to learn the error of his ways.Baker also invites Carney to the Annual Hayek Memorial Lecture held by the IEA thinktank on 8 June, to learn the error of his ways.
You can sign up here: George Selgin on stability without Central BanksYou can sign up here: George Selgin on stability without Central Banks
11.39am BST11.39am BST
11:3911:39
During a long discussion on sterling, Ben Broadbent suggests that the pound could fall by 5% if Britain votes to leave the EU.During a long discussion on sterling, Ben Broadbent suggests that the pound could fall by 5% if Britain votes to leave the EU.
UpdatedUpdated
at 11.39am BSTat 11.39am BST