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Can Carney save the British economy?

Monday, July 01, 2013 - 01:55

July 1 - Former Canadian central banker Mark Carney takes the reigns at the Bank of England, the first foreign governor in the bank's history. Expectations are high, but as Ivor Bennett reports, he'll have his work cut out.

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If he was hoping for a quiet first day, Mark Carney didn't show his disappointment. Wherever the new Bank of England Governor went this morning, so did the photographers. According to Britain's Finance Minister, the Canadian is the outstanding central banker of his generation. A billing that's meant expectation couldn't be higher. The big question is, though, what about QE? Steve Saywell from BNP Paribas. SOUNDBITE (English) STEVE SAYWELL, GLOBAL HEAD OF FX STRATEGY, BNP PARIBAS, SAYING: "I think next month we would suggest he is likely to reengage QE. Our forecast here is for an extra 100 billion pounds on the balance sheet. that would see an increase from 375 to 475. but probably with some sort of forward guidance. it could be over the next 12 months or so." Interest rates will be another key issue for Carney when he chairs the Bank's Monetary Policy Committee. The UK benchmark's been at a record low of 0.5 percent for 4 years now. These are the people Carney will have to convince if anything's to change. IG's Alistair McCaig. SOUNDBITE (English) ALISTAIR MCCAIG, MARKET COMMENTATOR, IG, SAYING: "It'll be interesting to see if the sort of stagnation of activity for the Bank of England will maybe change. And we might see a little bit more of a proactive stance there as far as our stimulus for the economy is concerned. Certainly that's what equity traders will be hoping for." Mark Carney is the first foreign governor in the Bank of England's 300-year history. And it certainly wasn't a bad day to start. The strongest manufacturing data in over two years; the most mortgage approvals since 2009. But the bigger picture is a lot more gloomy. GDP is nearly 4 percent below the pre-crisis peak, a fall far worse than previously thought. He may be a rockstar to some, but this is by no means an easy gig.

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Can Carney save the British economy?

Monday, July 01, 2013 - 01:55