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03/07/2013

British can't wait for Mark Carney to arrive on his white horse

As a welcoming present, the British are poised to give Mark Carney greater powers to deal with the economic crisis facing the nation.

Carney, the incoming Bank of England governor, will be taking over in July. The Financial Times is reporting that Chancellor of the Exchequer George Osborne will use the March 20 budget to give Carney greater say over monetary policy.

Prime Minister David Cameron is rejecting calls to increase economic stimulus and to slow down on painful austerity measures, or, deep government cuts combined with tax increases, to get the stagnant economy moving again. The GDP dropped 0.3 per cent at the end of 2012 and the nation is poorer now than it was five years ago.

Cameron’s critics say the austerity plan is ruthless and his coalition government has not thought out the social consequences of what he has done. The most dramatic cuts are set to begin this April to social programs, municipal or council governments and ending tax breaks to the poor.

In a tweet sent Thursday, Cameron said, “If we stick to the plan and reject the false choices we can come through this with stronger, more resilient and (a) balanced economy.”

The Times reports Osborne will use the budget to reinforce a message of “fiscal conservatism and monetary activism” and they want the Bank of England to think new thoughts on monetary policy.

The B of E also has voted to keep interest rates at a historic low of 0.5 per cent.

We all know Carney is a fan of low rates, he uses them here in Canada in his current role as bank governor.

The stage is set. Britain is ready for its knight to come riding in and save the kingdom.

Tanya Talaga is the Star's Global Economics correspondent. Follow her on Twitter @tanyatalaga

 

 

 

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