Former Bank of England Governor Mark Carney and former British Prime Minister Liz Truss are at odds over their approach to the UK’s economy. Carney has accused Truss and other “ultra conservatives” of misunderstanding economic drivers, leading to confusion and a path to economic oblivion. Truss and her pro-Brexit allies argue for tax cuts and regulatory cuts similar to Singapore’s approach, but Carney believes this has caused the UK to resemble Argentina, a country plagued by financial and economic instability. Truss’s unfunded tax cut plan caused market panic and the pound crashed to record lows against the US dollar. Carney accuses the Truss government of undermining economic institutions, while Truss argues that the economic consensus Carney represents has led to low growth across the Western world.
Carney made his remarks at a summit for policymakers in Montreal, comparing the Truss government’s vision of a “Singapore on the Thames” to bringing Argentina along the Channel. Argentina was once a wealthy economy but poor policy choices led to economic crises, rampant inflation, a worthless currency, and large debts. Similarly, the UK is facing high inflation, sluggish economic growth, and a rising public debt burden. The Truss government’s economic policies have led to market turmoil, with the pound crashing and pension funds on the brink of bankruptcy.
Carney believes that the Truss government, with its lack of private sector experience and focus on free-market ideology, has failed to understand the importance of mission, institutions, and discipline in a strong economy. Truss, on the other hand, accuses central banks like the Bank of England, which Carney previously led, of enabling excessive government spending through low interest rates. She argues that high levels of taxes and regulations are hindering economic activity and causing stagnation in the UK’s economy.
This disagreement highlights the divergence in economic philosophies and approaches between Carney and Truss, and the implications for the UK’s economic future. While Carney warns of economic oblivion and the resemblance to Argentina, Truss defends her policies and criticizes the economic consensus that Carney represents. The UK’s economic trajectory will be shaped by the decisions and actions of its leaders in the coming years.