The Prospector had an in-depth chat with leading economist and author George Magnus on a wide range of domestic and global economic issues. This is the final part of the interview, which considers the extent to which Mark Carney, the Governor of the Bank of England, can be seen as occupying a political role. Carney’s speech yesterday in Scotland on the subject of the monetary consequences of Scottish independence indicated strongly that, unlike his predecessor, he is willing to adopt highly politicised positions. Carney insisted that his speech was “technocratic,” but its political implications were more than clear.
The interview concludes with remarks on the matter of British membership of the EU, an especially germane subject on this, the day that the government is facing a back bench rebellion over the Immigration Bill: a rebellion intended to raise the prospect of Britain’s departure from the EU, an outcome that Magnus makes clear would not be in the interests of British business.
Jay Elwes: On the subject of Central Bank governors and their politics—Greenspan was reflexively a Republican; Volcker was strongly associated with the Democratic side. But Bernanke was confronted with such a terrible situation that there was not quite the time for his politics to manifest. It seems the Bank of England how has a quite political Governor—much more so than Mervyn King. I wonder whether you see any problem with that.
George Magnus: Well just as a supplementary, Bernanke is a Republican too and yet I don’t think one could say that he allowed his politics to interfere with his professional conduct or behaviour. My guess is that he could have been more assertive about budgetary restraint over the last three years, particularly in 2012-13 when the automatic spending cuts took effect. But I guess he would have been very conscious as well about being over-critical of Congress, given that large part of Congress were also very cr…