As Mark Carney takes over as governor of the Bank of England, City A.M. editor Allister Heath outlines three reasons to be optimistic that a Canadian head of Britain’s central bank will bring a breath of fresh air from outside the establishment.
VIDEO: The City has a new king
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As George Osborne is to unveil his Autumn statement City A.M. editor Allister Heath says that the chancellor needs to go further. Costly energy policy, capital gains tax, stamp duty and income tax all require radical reform.
As the OECD announces that the UK's economy is growing faster than that of Germany, France, the US or Japan, City A.M. editor Allister Heath says that while some of this growth is sustainable, much of it comes from excessive exuberance. Real wages also continue to fall as inflation exceeds income increases.
City A.M.'s Julian Harris discusses Bank of England governor Mark Carney's reaction to the prospect of a housing bubble and the government's Help to Buy scheme.
The second phase of Help to Buy, launched in October, has already seen over 2,000 applications for mortgage loans, but Julian argues that monetary interventions can exacerbate the problem of rising house prices. Rather than distancing itself from the scheme, the Bank of England should, he says, be assessing whether Help to Buy is a compounding factor.
As the rising cost of living effects everybody in the UK, with the poor being hit especially hard, City A.M. editor Allister Heath says the solution lies in cutting taxes for low income earners and boosting skills. The government, he argues, needs to go back to the root cause of the problem.