Unwilling or unable to engage with Mark Carney’s argument that Brexit could trigger a “technical recession”, the Leave camp is instead accusing the Bank of England governor of breaching his obligations. The reality is exactly the opposite; Carney would have breached his obligations if he hadn’t given a warning.
Tory MP Andrea Leadsom, appearing on the Andrew Marr Show, called the Bank’s Inflation Report an “incredibly dangerous intervention”, adding that “purely speculative” forecasts are “not inside their remit”.
But the Bank had a legal obligation to make this “intervention”. It has to publish quarterly reports, outlining how it intends to keep inflation on target at 2%. As part of these reports, the Bank makes forecasts based on current government policy, and outlines factors that may cause its forecasts to go awry – such as the consequences of a vote to leave.
In an email to InFacts, Leadsom said the Bank examined a “downside only” version of Brexit. But even ardent Brexiteers, such as Boris Johnson, have acknowledged that any Brexit dividend could follow a period of short-term uncertainty – the so-called “Nike swoosh”. In other words, the reason for Leadsom’s irritation is the Bank is staying within its remit.
Iain Duncan Smith fell into a similar trap. Appearing on the Sunday Politics, the Tory MP claimed that the Bank did not highlight “the threats of remaining”. Given that the Bank’s forecasts are predicated on the assumption that we stay in, these “threats” are not a risk to the forecast.
Duncan Smith’s criticism that Carney strayed into a “simple, personal, prediction” is equally unfounded. When Carney answered a journalist’s question by saying a “technical recession” was a possibility, he was summarising the contents of a report signed off by the Bank’s entire Monetary Policy Committee.
Duncan Smith also had a conspiracy theory. He attempted to discredit Carney by saying the governor “used to work for Goldman Sachs, we see Goldman Sachs running all the way through this, they are funding the remain campaign”.
The Leave camp’s treatment of the Bank of England echoes its treatment of the IMF, OECD, President Barack Obama and a host of other reputable commentators. It is just the latest example of shooting the messenger rather than engaging with an uncomfortable message.
Iain Duncan Smith did not respond to requests for comment.