Mark Carney: Is he what Britain’s economy wants?
Complied by Tashae Haughton
Britain’s future Bank of England Governor Mark Carney testified in front of British Parliament today to explain his plans when he takes over for the current governor Sir Mervyn King on July 1.
Carney explained why he changed his mind to take the job after when he initially turned down the offer. Carney told British MPs he accepted the five-year deal, instead of the original offer of seven years, because it worked for his family commitments, the CBC reported Thursday.
Dominic Valitis, from the CBC’s London bureau, told the CBC that Carney’s pay, which is around $1.3 million a year, was brought up and compared to that of staff at the Bank of England whose pay has been frozen. Carney said being payed that amount is only fair for executives who move to England because it is one of the most expensive places to live in the world.
When asked about the economic stimulus, Carney said he wants to have an inflation of two per cent from England’s current monetary policy.
“The flexible inflation-targeting framework should remain broadly in place, but details need to be reviewed and could be changed,” Carney told Parliament.
As for U.K.’s history of economic woes, This is Money UK, an online financial publication, dubbed the recession of 2008 the “Great Recession.” This is Money UK said in 2010 Britain took yet another turn for the worse, blaming a heavy December snow fall for their economic struggle for the first part of 2011.
Britain’s economic downturn was an outcome of the government’s hike to its Value Added Tax (VAT) in January 2011, said This is Money UK.
This is Money UK reported that at the beginning of the sovereign debt crisis, the U.K. was overspending. It had one of the worst budget deficits in the European Union (EU) in April 2010 reported This Is Money UK.
If you want to talk numbers, last year Britain owed £1,022.5 billion according to the Officer for National Statistics. When converted to Canadian dollars it’s $1.3 trillion dollars. Therefore the government needs to borrow £127 billion which is $1.9 trillion dollars, reported This is Money UK.
To offer stability to UK’s economy, Carney said in video on CBC, “Flexible targeting, in my opinion, is the most successful monetary policy framework, the overall framework, is very high.”