Brexit? I've no idea what's going on either, says Mark Carney

Mark Carney at the Treasury select committee

The governor of the Bank of England took a lot of flak during the EU referendum campaign for forecasting an economic downturn in the event of a Brexit vote, so he was hellbent on giving away as little information as possible at his latest appearance before the Treasury select committee. See no evil, hear no evil, speak no evil.

“I may be a bit thick,” said the Conservative Kit Malthouse, a newcomer to the committee, “but can you explain what exactly forward guidance is?”

“The thing about forward guidance,” drawled Mogadon Mark Carney, opening one eyelid a millimetre or two, “is that it is guidance that is forward. Which isn’t to say it’s meant to be in any way accurate. Indeed, it would be surprising if it were. The most important thing about forward guidance is that the underlying economic determinants should be correct, not that it should be helpful.”

Andrew Tyrie, the committee chair, stepped in to try to clarify matters. “So what you’re saying is that though the forward guidance might not make sense now, it might do at some point in the future?”

Mogadon Mark flashed one of his expensive smiles, but resisted the temptation to spell things out in black and white. Why couldn’t the committee understand that there was no point in him giving accurate forward guidance, because then there would be no chance for him to come back and revise that guidance in future forward guidance?

Labour’s John Mann was keen to find out if the Bank had an inside track on the government’s Brexit policy. Mogadon Mark shook his head.

“So you’re as much a bystander in all this as the rest of us,” observed Mann.

“Basically, when you put it that way, yes,” Mogadon Mark replied.

“So while the prime minister is doing nothing, you’re being kept at arm’s length,” Mann said. “Do you think there’s a case for parliament to widen your remit so that you can inform us of the consequences of different plans of action?”

A look of horror crossed Mogadon Mark’s face. There was nothing he would like less than to have his remit widened. Once bitten, twice shy. If the government was going to screw up Brexit, he didn’t want his perfectly manicured fingerprints anywhere near the mess. Let them take the rap.

Labour’s Rachel Reeves pressed him on this. Even if the government were to decide on its objectives for Brexit, it couldn’t guarantee to deliver on them, so would he not consider drawing up some risk scenarios? “People are crying out for more information,” she said.

“Me too,” Mogadon Mark shrugged. In the meantime, he was just keeping on keeping on. What do they know of economics who only economics know?

“Can you explain why inflation was not as high last month as you expected?” Reeves continued.

“It’s the footwear situation,” he answered.

Noticing the blank faces staring back at him, Mogadon Mark talked them through it. October had been warmer than usual, so people hadn’t needed to go out and buy new shoes. And, yup, the British economy was so fragile that one month of nobody buying shoes could massively distort the inflation figures. “But don’t worry,” he said, confidently. “I’ve checked the weather forecasts and inflation is going to shoot up next month.”

Visibly reassured, the committee moved on to the slump in the pound.

“Was the fall in the exchange rate welcome?” asked Tyrie.

“It was necessary,” Mogadon Mark replied.

“But was it welcome?” Tyrie pressed.

“It was necessary,” Mogadon Mark deadpanned again.

“Can you think of anything that is necessary but unwelcome?” the chair asked.

He could. These quarterly appearances before the select committee, for a start. But he was too polite to mention it. Instead, he chose to invite everyone in the room to the Bank’s Christmas party. I’m holding my breath.