BANK of England Governor Carney has fallen out with PM May telling her that he will not take orders from politicians on what the Bank of England’s policies should be.
He spoke up just days after the Tory Party conference, where May criticised the Bank’s policies of low or no interest rates and quantitative easing on a grand scale saying: ‘People with assets have got richer. People without them have suffered. People with mortgages have found their debts cheaper. People with savings have found themselves poorer.’
She added: ‘While monetary policy – with super-low interest rates and quantitative easing – provided the necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects.’
Carney has responded by insisting that the emergency medicine is here to stay, saying: ‘Politicians have done a very good job of setting up the system. Where it can be difficult sometimes is if there are political comments on our policies as opposed to political comments on our objectives.
‘The objectives are what are set by the politicians. The policies are done by technocrats. We are not going to take instruction on our policies from the political side.’ The bankers are in revolt!
Tory backbenchers described his comments as ‘nonsense’ and said that the Governor should not be ‘picking a fight’. Carney has in fact told May to sod off, and that bankers won’t be interfered with!
Since both of them are treading an economic high wire, way above the crisis-ridden Niagara Falls of capitalism in crisis, in a huge gale, and with the fortunes of capitalism on their tiny shoulders – this is certainly not the time to fall out! But fall out they have since the bankers are not willing to share their wealth with any other section of society.
Carney also threatened that ‘A change has got to come. And we are going to deliver it.’ What he is set to deliver is a situation where the collapsing pound leads to a massive price inflation, and an enormous sharpening of the class struggle. Carney says this will be May’s problem not his!
He is seeking to impose starvation on the masses. Dealing with the consequences is not his problem. Meanwhile, Tories are aghast at his declaration of independence, with Tory MP Bernard Jenkin declaring, ‘The pursuit of quantitative easing is a matter for the government, which is why Mr Carney wrote to the Chancellor to ask his permission to pursue that policy.’
Jenkin also asked: ‘Why is the bank governor picking a fight with the Prime Minister? What’s his real agenda?’ His real agenda is to prop up the banks and to hell with everybody else, especially when the next banking disaster explodes.
Carney admitted to an audience in Nottingham that the current environment of low inflation was ‘going to change’, with the drop in the value of the pound likely to push up prices across the economy.
Speaking for the bankers, Carney said: ‘We’re willing to tolerate a bit of an overshoot in inflation over the course of the next few years in order to cushion the blow and make sure the economy can adjust as well as possible.’
The recent ‘flash crash’, when the price of the pound dropped by more than 8% from $1.26 to $1.1491 in just eight minutes, gives an indication of the inflation that is ahead. Sterling, in the words of one analyst, ‘fell off the cliff’. The inspiration of the bankers and speculators is what they achieved and the billions that they made out of crashing the pound and forcing it out of the EU’s Exchange Rate Mechanism in 1992.
To save the pound from complete wipe-out and British capitalism from complete disaster, the then Tory Chancellor Norman Lamont raised interest rates from 10% to 12%, then to 15%, and authorised the spending of billions of pounds to buy up the sterling that was being frantically sold on the currency markets – enriching the bankers.
We are now on the brink of another and even greater crash of the pound and of British capitalism with it. The only solution is to take advantage of the split in the ruling class, to get rid of the bosses and the bankers with a socialist revolution that nationalises the banks and the major industries, bringing in a planned socialist economy.