Brexit Bulletin: Boris and the Bank of England
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Former U.S. Secretary of State Colin Powell said of war “you break it, you own it.”
Britain’s new Prime Minister Theresa May seems to have a similar view of foreign policy after handing key positions in her Cabinet to fellow Conservative Party lawmakers who (unlike her) successfully campaigned for the U.K. to leave the European Union.
Former London Mayor Boris Johnson, who dropped out of the race to succeed David Cameron, will be foreign secretary. Fellow Brexiteer David Davis will be May’s Brexit “Tsar” tasked with negotiating the Brexit, while former Defence Secretary Liam Fox is handed the job of establishing new trade links.
Steven Fielding, a professor of political history at the University of Nottingham, summed it up neatly:
“If the Brexit negotiations don’t go as people would like, then it’s the Leave people who’ll take the blame.”
Remainer Philip Hammond, who leaves the Foreign Office to become Chancellor of the Exchequer. He’s tasked with protecting the economy, defending the U.K.’s financial industry and helping May tackle the “burning injustice” she said many workers feel. A light workload, then.
Carney Back in the Spotlight
With a new man at the Treasury, today the focus switches – albeit briefly – to Bank of England Governor Mark Carney.
Carney's Monetary Policy Committee convenes in London today with 30 of 54 economists asked by Bloomberg predicting it will cut its key interest rate for the first time since 2009.
A majority see a reduction to a record-low 0.25 percent. Still, a lack of data on the outlook means 24 of those surveyed see no change this month.
What Are the Markets Doing?
The pound advanced as traders awaited the Bank of England’s decision. Sterling strengthened against all but one of its 16 major peers, approaching its highest level in more than a week versus the dollar.
Asian stocks were mixed by 7.30 a.m. in London, showing signs that a recent rally could be flagging.
We – and everyone else – just can’t resist Boris. The former journalist turned top U.K. diplomat has a colorful history of commenting on world affairs.
He once likened U.S. presidential candidate Hillary Clinton to a “sadistic nurse in a mental hospital.” During the referendum campaign he suggested Barack Obama had a “part-Kenyan… ancestral dislike of the British empire.” As recently as May, Johnson won a £1,000 ($1,310) prize for writing a sexually explicit limerick about Turkish President Recep Tayyip Erdogan.
And there were some interesting reactions to Johnson’s appointment: in Washington, State Department spokesman Mark Toner went through a range of facial contortions as a reporter passed on the news.
While back in the U.K., Labour leadership challenger Angela Eagle couldn’t quite control her reactions as effectively.