Bank of England new governor Carney makes fans in first week
At the end of his first week at the
Bank of England, Mark Carney
appears to have impressed the
markets, economists, and even a
group of determined female
protestors.
Since the new governor got his feet
under the desk on Monday morning, the
FTSE 100 has risen around 6%.
Economists welcomed the moves
towards "forward guidance", of which
we got a taste on Thursday.
The hint that base rates are unlikely to
rise soon sent shares soaring.
At the same time the pound took a
pounding, dropping below $1.50 on
Friday.
"But that was all part of the intention,"
said Vicky Redwood, chief UK economist
at Capital Economics. Weaker sterling
makes the UK's exports more
competitive, and so boosts the economy.
"It was a good week for Mark Carney,
and he hit the ground running," she
said.
'Smart guy'
The new governor also managed to win
over one group of women who were
determined to go into battle with him.
Faced with the news that no women
would be featured on the next issue of
pound notes, they had collected 33,000
signatures, demanding that the Bank
reconsider.
By Wednesday, Governor Carney had not
only announced there would be a
development on that front before the
end of July, but he had also agreed to
meet the protestors in person.
The women had been asking for a
meeting with the Bank since April, but
had received no reply.
Nevertheless they went ahead with a
protest on Friday outside the Bank of
England.
But it was clear the wind had already
been taken out of their sails.
"He has not yet confirmed that there
definitely will be a woman on a
banknote," said Caroline Criado-Perez,
who organised the petition through
Change.org.
"But there's definitely a shift in rhetoric,
so that's really positive," she told the
BBC.
"He is clearly a smart guy," she admitted.
Impact
Even before Mr Carney had arrived at
the Bank of England, his looks were
being compared to George Clooney's.
Rarely has a man been of such interest to
the media that even his wife's views on
tea-bags merited a few column inches.
Then there was the revelation that he
had his feet under the desk by 7am on
his first day in the office.
That, along with the news that he got
there by way of the Underground,
helped endear him to London's early-
rising commuters.
Especially the detail of how he, like every
city worker before him, got a little lost in
the maze of exits from Bank tube station.
Jane Austen is a front-runner for next
woman on a banknote
But Vicky Redwood thinks his good week
may largely have been a case of
serendipity.
"The economic news this week has been
good," she said, referring to positive
reports from purchasing managers, an
upbeat house price survey from the
Halifax, and good news on US jobs.
"However, he persuaded the committee
to take the first step on forward
guidance, and that's an achievement.
You can see his impact on the markets,"
she said.
Pain for savers
One group that will not have warmed to
Mr Carney this week is savers.
The news that base rates will stay at
0.5% for some time to come will only
depress returns for them - and
pensioners.
Average interest rates on a cash ISA have
already fallen from 2.44% a year ago to
1.44% now, according to the website
Moneyfacts.
That's less than half the rate of inflation.
"With the base rate expected to continue
to remain at a record low, it is only
going to lengthen savers' pain," said
Charlotte Nelson from Moneyfacts.
So Mr Carney may not have saved the
economy in his first week.
But he has won some admirers.
And next week his resolve will be put to
the test when he meets the women who
want a female icon back on our
banknotes.
