15 Mar 2016
Brexit: Still poll watching - Scotiabank
Derek Holt, Research Analyst at Scotiabank, notes that the Bank of England Governor Mark Carney got into a spat of controversy this past week by doing the job of a good economist regardless of the pressure and politics.
Key Quotes
“Carney will be in the hot seat again this Thursday when the Bank of England tries to find new ways to say it’s not going to do a thing at least until it knows the fate that UK citizens wish to impose upon their own economy in the coming June 23rd poll. The latest surveys continue to show a neck and neck race but with a large undecided component. A caveat is that the polls are generally on-line in nature and so the usual caveat applies in that they may be over-sampling the young and the restless millennials and under sampling those who may have somewhat more to lose by employment and assets. Our house view remains that the Brexit vote is one to “stay” in part because the undecided are unlikely to be disproportionately weighted toward risk takers on game day.
Did Carney fundamentally violate any basic principles by way of the separation of central banking from governance issues? That line was blurred long ago when governments largely abdicated responsibility for the global economy to their central banks so don’t start criticizing them now. The Governor of one of the more powerful central banks has a duty to weigh into the debate given the intellectual muscle that resides on Threadneedle Street.
If you doubt that, then just imagine the cause for criticizing the BoE if it stayed mum on the topic only to watch the UK economy go into recession, and with it the migration of good jobs elsewhere. The topic is also likely to resurface at an EU Leaders Summit toward the end of the week.”
Key Quotes
“Carney will be in the hot seat again this Thursday when the Bank of England tries to find new ways to say it’s not going to do a thing at least until it knows the fate that UK citizens wish to impose upon their own economy in the coming June 23rd poll. The latest surveys continue to show a neck and neck race but with a large undecided component. A caveat is that the polls are generally on-line in nature and so the usual caveat applies in that they may be over-sampling the young and the restless millennials and under sampling those who may have somewhat more to lose by employment and assets. Our house view remains that the Brexit vote is one to “stay” in part because the undecided are unlikely to be disproportionately weighted toward risk takers on game day.
Did Carney fundamentally violate any basic principles by way of the separation of central banking from governance issues? That line was blurred long ago when governments largely abdicated responsibility for the global economy to their central banks so don’t start criticizing them now. The Governor of one of the more powerful central banks has a duty to weigh into the debate given the intellectual muscle that resides on Threadneedle Street.
If you doubt that, then just imagine the cause for criticizing the BoE if it stayed mum on the topic only to watch the UK economy go into recession, and with it the migration of good jobs elsewhere. The topic is also likely to resurface at an EU Leaders Summit toward the end of the week.”