After seven years of Mark Carney, now we have Andrew ‘numbnuts’ Bailey, the present Governor of the Bank of England.

Are we in a Carry-On film or are they the Keystone Cops?

Lest we forget ‘Barmy’ Carney made five appalling predictions on UK interest rates, inflation, and the growth of the economy.

For his views we paid him some £847,000, as the Governor of the Bank of England plus a huge pension.

In August 2013, he predicted that UK interest rates would not rise until the employment rate was down to 7% which was not expected until late 2016.

Fact: it fell below 7% less than a year later.

Interest rise

In July 2015, he predicted that interest rates may have to rise during the course of the year. Then less than six months later, he said: “Now is not the right time for an interest rise.”

In February 2016 he proclaimed that interest rates would “more likely rise than not.”

Fact: three weeks later he said: “We could bring interest rates down towards zero.”

This goon made more about-turns than Captain Mainwaring.

ANDREW BAILEY

Now, of course, we have Governor Andrew Bailey.

In autumn last year Andrew Bailey foolishly predicted that “the UK would in all likelihood have the longest, deepest, most damaging recession in 300 years”.

This had the effect of terrifying the public, investors and institutions. And this tumult was exacerbated by the political convulsions of the Truss and Kamikaze Kwarteng debacle.

However, against his worst prediction, the UK economy grew in December 2022 when it was meant to be in recession. Somewhat perversely, inward investment in the UK has been one of the highest in the G7.

Inflation is moving progressively downwards to a sustainable long-term predicted rate of between 2% and 4% within 18 months as energy, transportation and commodity costs fall as a result of the global recession.

INTEREST RATES

The rise to 4% interest rates by the Band of England was well predicted but let us hope that this is the pinnacle. 

The higher cost of borrowings should have the desired effect on inflation, which may have already peaked, without extinguishing growth.

Although cheap money, which we enjoyed up until now, is well and truly over, if interest rates can remain at around this level, it will become assimilated and absorbed into the consumer psyche, in the medium to long term.

Inflation is predicted to be 2-4% within two years, which may mean that interest rates could come down from this level which will be good for both the economy and residential housing alike.

Trevor Abrahmsohn is founder and Managing Director of London estate agency Glentree.