Mark Carney: Britain's Celebrity Central Banker
An awed hush descended over the crowd, as the most powerful man in the British economy prepared to give his response. Sitting at the front of the room, Bank of England governor Mark Carney surveyed his audience, paused to consider the question for a moment, and then finally decided on his answer: “Pizza.”
The event in question took place last month, when Mr. Carney visited Whitley Academy in Coventry, a small provincial city in the English midlands, where he was questioned by a group of 12–18 year old pupils on everything from his favourite kinds of food (pizza, for the record) and chocolate, to his favourite television programmes, to whether he preferred dogs or cats. The event was part of the BBC’s “School Report” initiative, which aims to give young people a taste of what it’s like to work for Britain’s state-sponsored news and entertainment monolith. As well as Mr. Carney, BBC School Report has also allowed pupils to meet with celebrities such as Angelina Jolie. But even in such illustrious company, the pupils’ meeting with the man in charge of the world’s oldest central bank left them impressed with how “informal” and even “cool” he was.
They aren’t alone. Ever since he was appointed to the position in 2013, the personality and antics of the UK’s monetary policy czar have delighted and captivated the press. In the eyes of the British public, everything from his square jaw to the accent stemming from his far-off and exotic homeland of Canada, makes Mr. Carney appear closer to some sort of Hollywood celebrity than to the technocratic coterie of crumpled grey suits who preceded him in the post. Over the past year in particular, Mr. Carney has happily cultivated for himself a degree of national visibility from which many of his predecessors would have shied, even when the media’s adulation of the BoE governor seems to centre as much around personality as it does around policy. After he cut interest rates to their lowest level in history this summer, for example, the media were delighted to photograph him conspicuously attending a music festival just days later, replete with brightly coloured polo shirt and a “glitter tattoo” on his face. In the immediate aftermath of Britain’s vote to leave the European Union, which Carney loudly proclaimed to be the “toughest day” he’s ever faced as BoE governor, he was nevertheless sure to be photographed chatting with famous actors at Wimbledon. London’s Evening Standard even went so far as to call him "the biggest babe in banking,” on account of his “George Clooney good looks.”
As absurd and amusing as this all may be, it nevertheless represents a development which could provide clues to what the future of the British political landscape might look like. When placed in the context of the disarray and chaos engulfing Britain’s political system at present, Mark Carney’s self-conscious ascent into the elite club of “celebrity” central bankers, could have more to it than first meets the eye.
Since last year’s general election, and particularly since the referendum to leave the European Union this summer, British politics has entered into a period of unprecedented uncertainty and turmoil. The Labour party, which comprises the official Opposition for the time being, has had the hard-line socialist Jeremy Corbyn parachuted into its leadership position by Trotskyite infiltrators, leaving the party both internally divided and wildly unpopular with the electorate. The centrist Liberal Democrats continue to languish in irrelevance since their electoral wipeout last year. Even UKIP, who were on the winning side of the Brexit referendum, have nevertheless suffered a spectacular implosion since. Their new leader resigned after just 18 days in the job, and the man hoping to replace her was hospitalised after an alleged brawl with a colleague from his own party. On top of all this, allegations of an anti-Farage conspiracy at the highest levels of UKIP have plunged the party into virtual civil war.
This utter meltdown of almost the entire opposition has left the governing Conservative Party virtually unopposed in Westminster, and even prominent opposition leaders have questioned whether there will be any viable threat to their power for decades. One check on the new government’s power remains, however, and it is one which has appeared to exercise an unusual degree of influence over their decisions since the Brexit referendum: namely, the value of the Pound. Having reached almost $1.50 before the referendum, the value of Britain’s currency has since plummeted dramatically to around $1.23 as I write this. Its often severe fluctuations appear to be one of the only checks left on the power of new Conservative Prime Minister Theresa May, as she lurches wildly and explicitly away from the free market ideas which inspired Margaret Thatcher. After the unprecedented degree of business-bashing at the recent Conservative Party Conference, the Pound experienced a “flash crash,” falling from around $1.26 to as low as $1.14 in a matter of minutes, forcing the government to partially walk-back its interventionist rhetoric. The degree to which fluctuations in the value of the Pound are currently influencing government policy led the chief currencies analyst at HSBC to opine that “the currency is now the de facto official opposition to the government.” And the person in charge of that currency is the same man who, over the past several months, has been quietly transforming himself from an anonymous technocrat into a household name: Britain’s celebrity central banker, Mark Carney.
Mr. Carney and Mrs. May now find themselves as essentially the only two pillars left standing in the rubble that was British politics, and contrary to the former’s recent assurances, it can be expected to be a relationship marked as much by conflict as by co-operation. Aside from her generally anti-market tone, Theresa May’s recent speeches have also broken with orthodoxy by taking aim at the Bank of England’s policy of low interest rates and massive quantitative easing. She has argued that savers and people without assets have suffered thanks to the Bank’s policy, perhaps pointing to a more active use of fiscal, as opposed to monetary policy in the pursuit of growth in the future. There has even been speculation that the Bank’s independence could be brought under review during her premiership, if the “de facto opposition” of the currency is seen to constrict Mrs. May’s plans too severely. In the long term, the way in which this conflict between Britain’s executive branch and its central bank is finally resolved, could hold significant clues for what Britain’s political landscape could look like in the future. In the coming months, however, as the fight to fill the vacuum at the top of British politics continues, we can expect to hear a lot more from the UK’s celebrity central banker than just his opinions on pizza.
George Pickering is a student of economic history at the London School of Economics and a graduate of the Mises University.