Wednesday 28th November
The news is usually disappointing and invariably unsurprising; most news is simply a confirmation of previously trailed hints and nudges. We live in such a micro-managed world that there are rarely complete surprises, so it was real news when George Osborne announced that the replacement as Governor of the Bank of England was a Canadian, Mark Carney. Yes, nobody guessed, and the reaction has so far been positive, but what difference will it really make? The head of the Bank of England is slightly more than a figurehead, but not much more. He will have to work closely with whoever is Chancellor of the Excheqeur, and will mainly be chairing meetings and making the occasional speech. His most important task will be not rocking the boat, as he tries to steer the UK economy away from the reefs and into open clear water. I wish him well, but suspect that without a change of policies from this Government the economy will bump along the bottom for a while longer. There will be occasional good quarters like the one just gone when it will look as if things might be getting a bit better and really bad ones when we will slip right back, but real progress is hard to see for a few years.
The world has shifted; while Europe and America were happily building up huge piles of debt – commercial, sovereign and personal – and enjoying unparalleled growth since the late eighties, the East and China in particular was working hard and building up real industries that actually made things rather than more and more complex financial models that have now unwound with such spectacular results. Almost every mobile phone and computer is now made in the Far East, almost all clothing is outsourced there too, most steel is made there, an awful lot of cars too. And that fundamental will not change. It doesn’t mean the end for the West, they will still need us to be earning enough to buy all the crap they make, but the appointment of a new man at the top will not change things very much at all I am afraid.