Speaking at the Times CEO summit this morning, shadow chancellor Ed Balls sought to deflate over-hyped expectations for the new Bank of England governor Mark Carney. “He is not the messiah, he can’t work miracles,” he said, and Osborne is "foolish" to think so. He added that with interest rates very low, it’s not possible for the Bank of England to drive the recovery.
On banking reform, Balls said we need to clearer lines betweeen retail and investment banking. He criticised how the departure of former RBS chief executive Stephen Hester was handled, saying it was "destabilising", sending out the wrong signals about how Britain works with business, and that the taxpayer stake in the bank is now worth £4bn less than before.
According to live tweets from Times deputy political editor Sam Coates, Balls also said that the current government should be borrowing more to get the economy moving:
Balls: "The economy needs some oomph ..Does that mean more borrowing than current plans. Yes it does to get growth moving and deficit down"— Sam Coates Times (@SamCoatesTimes) July 2, 2013
And when the economy is weak and the standard of living is falling, Osborne was unwise to cut the 50p top rate of tax, although he didn't go so far as to say Labour would reintroduce it.
He did concede, however, that Labour did not cut the public sector enough when it was in power - “In reality we will have to do that.”
Thanks to Balls's clarification that Carney is not the messiah and Seven Investment Management co-founder Justin Urquhart Stewart's assessment that he is also not Hollywood actor George Clooney, we now have a pretty good idea of who Carney isn't. It may be a while until we find out who he is though - as Live Squawk's Yogesh Chandarana pointed out yesterday:
Carney's first official speech as BoE governor appears to be on 28 Aug: http://t.co/H0Kn5nlrAj— Yogesh Chandarana (@Yogi_Chan) July 1, 2013