It feels like a long time since economy-watchers were gripped by the saga about how long Mark Carney would stay at the Bank of England. In fact it was only two weeks ago that the governor agreed to extend his term by a year to 2019 after an apparent attempt by various Conservatives to drive him out as soon as possible.
His critics were emboldened by Theresa May’s criticism of recent monetary policy in her conference speech, but in the end May needed Carney – and his decision came across as if he’d granted the prime minister another year of his time.
When he took the job in 2013, Carney said he would only serve five years of the usual eight-year term, but – after enduring barbs from William Hague, Michael Gove and other Tories – leaving as planned in 2018 could have looked like flouncing out.
Andrew Tyrie, the indefatigable chairman of the Treasury committee, wants to know more and will get his chance on Tuesday when Carney and other BoE rate-setters appear before MPs. The session will also pit the governor once more against his most personal critic, the anachronistic Tory backbencher Jacob Rees-Mogg, who was bizarrely touted as a potential replacement for Carney. The governor could barely hide his irritation at Rees-Mogg during previous committee sessions, so Tuesday should be fun.
May’s governance moment
The word on the corporate governance grapevine is that this could be the week the government publishes its proposals for holding companies to account.
In her pitch for the Tory leadership, Theresa May said she would put worker and consumer representatives on boards and impose binding votes on bosses’ pay. May repeated the pledge in her conference speech last month, setting herself up as the champion of working people left behind by globalisation. But lobbyists have been working away at the government, suggesting weaker alternatives to employees on boards such as workers’ councils, or giving a director the job of sounding out the workforce.
If that happens, the City and the government could have a hard time since Donald Trump’s victory reinforced the idea that disenfranchised workers are in revolt. Unions and other supporters of reform could reasonably argue May has been got at by big business just when she should be sticking to her promises. The government has said only that the proposals will come before Christmas, so we may have to wait a bit longer: but the speculation shows how exercised investors are about the matter.
Troubled vintage at Majestic?
When Rowan Gormley arrived at Majestic Wine in April 2015 he was greeted as a saviour after years of recurring disappointments at Britain’s biggest independent wine merchant.
Majestic, which reports half-year results on Thursday, brought Gormley in along with his Naked Wines business and his ideas made sense. He scrapped the offputting six-bottle minimum purchase and set about livening up shops and products and giving staff more time to talk to customers. But things have got gloomier this year. The shares lost a quarter of their value in one day in September when Gormley unveiled a profit warning caused by a failed US marketing campaign and weak sales to business customers.
Perhaps more worrying for Majestic in the long run is the big fall in the pound since the vote for Brexit. English wines may be increasingly popular, but almost all Majestic’s stock comes from France, Australia and other countries whose goods have become more expensive. Gormley has said cost increases may need to be passed on to customers but supermarkets locked in a price war may choose to absorb some of the hit, limiting his scope to protect profits. Gormley is doing the right things but, with the crucial Christmas period coming up, what assurances can he give about sterling’s fall?
