Mark Carney

On Wednesday, Mark Carney made a speech about the issues an independent Scotland would have to consider if it were to seek a currency union with the rest of the UK.

Although the Bank of England governor insisted that his remarks were of the technocratic variety, their political implication was obvious: a currency union would require the ceding of sovereignty by the newly independent country. There would need to be a banking union, “shared fiscal arrangements” and an agreement over how the BoE would provide facilities to Scottish banks as lender of last resort. The history of the eurozone gave Mr Carney’s speech its context; it was one of the best that Jean-Claude Trichet never gave. 

Mark Carney, the new Bank of England governor, wants to make sure everyone is clear on the definition of a threshold. His first attempt at explaining the BoE’s “forward guidance” policy was met with scepticism by the bond and currency markets. Today during a speech in Nottingham, he had another go. In particular, he was keen to stress that a return to a 7 per cent unemployment rate, the threshold set by the Bank of England earlier this month, would not necessarily lead to a sudden rise in the base rate.