Press Watch 8/11/19

You aren’t likely to hear it on the BBC, but there were two significant official events yesterday.


Bank of England economic forecast


In an alarming move, unprecedented in recent election periods, yesterday the Bank of England has downgraded UK growth on the back of a proposed course of action laid out by the governing party.


This was the Bank’s reaction to Johnson’s Brexit deal, according to The Times Newspaper…


After three years of Boris Johnsons Brexit deal being implemented, the economy will be about £14bn smaller than previously thought as a direct result of the Government’s proposed withdrawal agreement and free trade deal.


This is on top of an economy which is already decisively weakened by a decade of underinvestment.


The downgrade emerged as two Bank of England policy advisors went even further and voted to cut rates this month, citing “downside risks from persistent Brexit uncertainties”. Rates were held at 0.75% after the other seven members of the monetary policy committee voted for no change.


But commentators and the Markets now expect a rate cut early next year in a sign that all is not well with the British economy.


Until now, the Bank’s model has foreseen a relatively stress-free transition out of the EU for the economy. It appears now that given the passage of the second reading of Johnson’s plan, the Bank felt that it had to adjust its projections downwards.


The Bank’s governor Mark Carney is reported as saying: ‘We are conditioning our forecast, as has been our longstanding practice, on government policy. Government policy is this deal, it’s passed the second reading in the Houses of Parliament. So now [we are] moving from a stylised assumption to a specific assumption.’


Given this assumption, the Bank said that “the level of GDP ends the forecast period around 1% lower than in August [the previous forecast]”.


Civil Servant suppresses Economic forecast


At the same time as the Bank’s forecasts were less than reassuring, the Treasury watchdog scrapped plans to publish updated borrowing forecasts an hour before they were due to be released.


The Times reports that the country’s top civil servant decided that it would break election rules to publish the figures.


Economists had been expecting the Office for Budget Responsibility to revise up its government borrowing forecasts, a move that would put the Conservatives in breach of their fiscal rules before election day.


An hour before the scheduled publication at 9.30am, the OBR announced that the plan had been halted after an intervention by Sir Mark Sedwill, the cabinet secretary.


Scarlet Standard says what have they got to hide? You can be sure of one thing: if it was good news it would be all over the BBC as well as in the right-wing newspapers.

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