Mark Carney’s future at the Bank of England and four other things to look for this week in economics

He has been under attack from Tory backbenchers and former ministers for being anti-Brexit, and the policy of ultra-low rates more generally has been criticised by other politicians, including the Prime Minister

Bank of England (PA)

This will be the week when the Bank of England decides what to do about interest rates. The chances of a cut declined radically last week, after better-then-expected third-quarter GDP figures were released showing growth running at an annual rate of 2 per cent. But the meeting of the monetary policy committee, which concludes on Thursday, is important for two other reasons. We will get the Bank’s quarterly Inflation Report, and we may learn more about Mark Carney’s future as governor.

The Inflation Report will give the Bank’s forecasts for the economy ahead of those of the Office for Budget Responsibility, published alongside the Chancellor’s Autumn Statement on 23 November. So we get the first of the two main official forecasts of how the economy is likely to fare next year. First, the Bank economists will have to explain why they got things so wrong in their previous forecast in August, when they thought the economy would grow by only 0.1 per cent in the July/September quarter. That forecast was the justification for the last cut in rates. Had the MPC members known what would actually happen they probably would have taken a different decision. But the good growth through to the end of September may not mean that growth will continue equally strongly next year, so the forward look will be crucial.

As far as Mark Carney’s position is concerned, he originally accepted the job on the basis that he might choose to serve only five years instead of the normal four years, plus another four years. He has been under attack from Tory backbenchers and former ministers for being anti-Brexit, and the policy of ultra-low rates more generally has been criticised by other politicians, including the Prime Minister. His present term would end in the middle of 2018. He has said he will make up his mind whether to serve longer on personal grounds, and will announce the decision later this year, and it is conceivable that he might tell us this week. Whatever he does, the important thing will be to distinguish between the independence of the Bank and the decision of who is governor. But were he to say he will leave in 2018, there would surely be a negative impact on the pound … as if it were not weak enough already. The Government would have to make a strong assertion about the independence of the Bank of England to steady things.

There will be two things to look for in the US, quite aside from the whole political drama. The first, on Wednesday, will be the Federal Reserve’s decision on interest rates. It is most unlikely to do anything so close to the election, but listen for hints about an increase next month. The US also had strong third-quarter growth figures, an annual rate of 2.9 per cent GDP growth, which is seen as making that increase an odds-on bet.

The other will be the US employment and unemployment numbers out on Friday. These will be the last ones before the election, and while they can hardly be expected to have more than a minor impact on voting they will at least support the growing consensus that the economic recovery is secure. In theory that should be positive for the Democrats, who can say they have delivered on economic competence. In practice? Well, who knows?

Finally there will be the reaction to the Uber court decision in Britain. This has huge importance, far beyond the status of Uber drivers, because it is the start of a series of legal and political moves that will help shape the relationship between the self-employed and employers for a generation. The vast majority of people who are self-employed chose to be so, and prefer that status. But those who don’t, up to one-third in some surveys, will reasonably want more protection. How this is mediated is in part an issue for the courts but courts are not good at coping subtleties of the relationship. In any case a legal and tax system built round people being in jobs, rather than working for themselves, will have to be reformed.