Bank of England governor Mark Carney just waded into the long campaign ahead of the UK’s referendum on EU membership, with a speech at Oxford University on Wednesday night.
Along with it, the BoE published its own 100-page analysis of how EU membership affects its operations as a central bank.
Earlier in the week, the UK’s Treasury Select Committee was promised a “yawner” of a speech by Carney. And of course, he didn’t openly back either side in the campaign.
Two phrases have been most clearly seized on from his comments. The first was his argument that “in some respects the UK is the leading beneficiary of the famous ‘Four Freedoms’ first set out in the 1957 Treaty of Rome.”
The second, shortly afterwards, was that “the EU has arguably bolstered [the UK’s economic dynamism] by establishing the world’s largest single market with free movement of goods, services, capital and labour.”
He didn’t pick a side, but his statements are hardly difficult to translate from cautious central bank-speak. There are dogs in the street that know Carney’s speech will come as a joy to pro-EU campaigners and a headache for the Brexit brigade.
Try to reverse one of those phrases — if Carney had said that the UK had been in some respects the biggest loser from the European Union’s set-up, would any number of further qualifications in the rest of the speech have made it significantly less anti-EU?
It may well be that the BoE’s intervention is a simple statement of the mainstream economic consensus — most economists I speak to seem to be thinking on roughly the same lines as Carney. The EU may need reforming and tweaking, but in general, it’s a good project and it’s worth working on it.
So perhaps it’s quite reasonable for the governor to intervene in that way, to simply state the facts as the Bank sees them. After all, an exit from the EU would almost certainly affect the Bank’s ability to meet its mandates for financial stability and inflation.
But his speech undoubtedly does more to give the “In” campaign a boost. IHS Insight’s chief UK economist Howard Archer says his “strong suspicion is that the pro-EU membership camp will find more to grab hold of and champion than the Out camp.”
Indeed, a quick look at the headlines online this morning shows that’s true. Here’s are some of the headlines that major UK news producers went for, with are overwhelmingly better for the pro-EU than anti-EU camp:
- Sky News: Carney: EU Has Made UK ‘Dynamic And Stronger’
- The Independent: EU membership ‘has boosted Britain’s economy,’ says Mark Carney
- Reuters: Bank of England’s Carney stresses EU’s boost to UK economy
- The Guardian: EU has made UK economy more dynamic, says Bank of England chief
- The Times: Europe has made Britain richer, says Carney
- Financial Times: Carney backs Britain’s EU membership
- BBC News: Bank of England says EU makes UK economy more dynamic
- The Mirror: Bank of England Governor says EU membership has increased ‘openness and dynamism’ of our economy
There are two headlines that are not straightforwardly positive, but not really entirely negative either
- The Daily Telegraph: UK must secure safeguards against further eurozone integration, warns Mark Carney
- The Daily Mail seems to have more than one, with “Bank chief Mark Carney says ‘Don’t let euro rescue hurt UK’,” and “Bank of England governor Mark Carney sets out the pros and cons of Brussels,” as well as the Reuters headline listed above.
Only the Sun seems to go with an outright negative (and relatively misleading) option with “EU club puts UK in peril” as their top line.
Carney hasn’t matched what Nick Macpherson, the chief civil servant at the Treasury, did over the Scottish independence referendum. Macpherson intervened during the campaign period, publishing his own damning analysis of Scotland’s capacity to forge a successful currency union with the UK should it have become independent.
He was criticised after the referendum and the House of Commons Public Administration Committee ruled that the advice should have been kept confidential.
Carney likely won’t receive the same treatment — and like Macpherson he may well be completely correct in his facts. But he shouldn’t kid himself that he’s not helping out either side in the coming referendum.