More Britons Expect Rates to Rise Than Fall as Inflation Spikes
UK households expect interest rates to rise in response to a resurgence in inflation, despite the Bank of England pledging to continue gradually easing policy.
The central bank's quarterly Inflation Attitudes Survey published Friday showed that more Britons expect rates to rise than fall over the next 12 months, with over a third of people questioned expecting the cost of borrowing to increase.
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Once considered the Bank of England's greenest-ever governor, Mark Carney has seemingly undergone a Damascene conversion. During his time at Threadneedle Street, he called on the world to leave 80pc of oil and gas in the ground. But now, as Canada's new prime minister, he wants to pump as much as he can to protect the country's economy from Donald Trump's trade war. Canada is going to become an energy powerhouse, Carney told reporters last week. And he didn't mean just in renewables. 'When I talk about being an energy superpower, I mean in both clean and conventional energies,' he said. 'And yes, that does mean oil and gas. 'It means using our oil and gas here in Canada to displace imports wherever possible, particularly from the United States. 'It makes no sense to be sending that money south of the border or across the ocean, so yes, it also means more oil and gas exports – without question.' This embedded content is not available in your region. Credit: CTV news These comments are remarkable given they come from a man who repeatedly called for an end to drilling during his tenure as Bank governor between 2013 and 2020. One such call came in a 2015 speech at Lloyds of London, when he described 80pc of the world's known fossil fuel reserves as 'unburnable'. He said: 'The catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors – imposing a cost on future generations that the current generation has no incentive to fix.' Given Carney's influence, his dramatic warnings inevitably shaped UK government decision-making at the time, as he championed the cause of net zero to a total of five different energy secretaries. Claire Perry, who served as Tory energy minister between 2017 and 2018, recalls: 'Mark had a huge impact on global climate issues. 'He created all the momentum around carbon markets and energy transition investment.' Sir Ed Davey, the Liberal Democrat leader who served as energy secretary in the 2012-15 coalition government, echoes this. 'Mark Carney had a real understanding of where the wind was blowing globally on energy, and recognised the risks to the economy of over-reliance on fossil fuels,' he says. After leaving the Bank, Carney also wrote a book called Value(s): An Economist's Guide to Everything That Matters, where he advocated powerfully for the introduction of carbon taxes. 'One of the most important initiatives is carbon pricing,' he wrote. 'The best approach is a revenue-neutral, progressive carbon tax.' The UK has since faithfully implemented that plan with a raft of carbon levies on consumers and industry, which many argue has left Britain burdened by some of the highest energy prices in the world. Jump ahead to 2025, however, and Carney – now a Canadian politician instead of a British bureaucrat – has adopted a wildly different approach. Immediately after succeeding Justin Trudeau as prime minister and winning Canada's election in April, he wasted no time in signing a directive cancelling Canada's existing carbon tax and confirming rebates for many of those who had paid it. He's now gone even further by pledging to build oil and gas pipelines, LNG export terminals, and to relax the emissions restrictions that have angered many of Canada's biggest fossil fuels producers. And his plans don't stop there. 'All this is not enough just to make Canada an energy superpower,' he said. 'It's not enough to build our full potential. 'It's not enough to truly get incomes growing across the country. We can do much more. We are going to be very, very ambitious. Build, big, build, bold.' Carney, who also previously ran the Bank of Canada, reconciles such ambitions with simultaneous pledges on green technologies that could theoretically reduce emissions, such as carbon capture and storage. But these will take years or decades to implement. According to experts, Carney's conversation has been driven by the economy, as oil and gas accounted for up to 7.5pc of the country's GDP in recent years. In 2023, crude oil exports alone were valued at $124bn, representing 16pc of Canada's total exports. That figure rises to 20pc if gas exports are included. What's more, Canada has about 171bn barrels of oil in recoverable reserves – far greater than America's 44bn. It means Canada can rely on oil for decades, whereas US production is expected to peak in the next few years. However, most of that oil and gas comes from one province, Alberta. That region alone holds billions of dollars, although its voters blame Carney's and Trudeau's Liberal party for climate restrictions that curbed economic growth. A recent opinion piece for Canada's Globe and Mail by Preston Manning, a retired politician who helped found Canada's conservative movement, warned that his 5m fellow Albertans had had enough of rule from Ottawa and were considering secession. Some go further. Alberta, they point out, shares a border with the US and perhaps has more in common with the likes of Texas than Toronto. These growing tensions have created a political opportunity for Alberta's conservative leaders. Less than 24 hours after Carney's election, Danielle Smith, Alberta's premier, introduced a bill to the province's legislature, making it much easier for a citizens' movement to trigger an independence referendum. The new rules slash the number of citizens' signatures required to trigger a referendum, from 600,000 to 177,000 and give petitioners 120 days to collect them rather than the previous 90. She has done so to pile pressure on Carney, handing him a list of nine energy-related federal laws she wants overhauled to unleash more drilling in Alberta. 'We cannot keep the over $9 trillion worth of oil wealth we have in the ground,' she said. 'Mark Carney has acknowledged that the federal government must address key policy barriers. 'That must include abandoning the unconstitutional oil and gas production cap, repealing the tanker ban, and scrapping Canada's net-zero power regulations. 'I believe in a strong and sovereign Alberta within a united Canada, but we cannot persist with the status quo. I won't allow that status quo to continue.' Smith is also exploiting the tensions generated by Donald Trump, the US president, whose talk of making Canada the 51st state resonates with some Albertans. This embedded content is not available in your region. She sees her demands as a test of the scale of Carney's commitment to oil and gas: 'Given his past actions, I've asked myself what version of Mark Carney are we going to get. 'Will we get the pragmatic Bank of Canada governor Mark Carney? Or will we get the environmental extremist keep-it-in-the-ground Mark Carney? 'I don't know the answer yet. He's saying some of the right things, but we need to see meaningful action.' Such tensions have been around for a long time. What Canada's politicians say and do are often very different things, says Brendan Long, a leading energy analyst and Canadian, whose new book Energy Shocks, compares the politics of energy in the UK, US and Canada. He points out that Canada has a long history of electing prime ministers with stridently green manifestos who then preside over huge increases in oil and gas production. 'While previous premier Justin Trudeau had explicitly anti-fossil fuel agendas, domestic Canadian oil and gas production grew dramatically under his leadership,' he said. 'Today, Canada is ranked fourth in terms of global oil production at 5.8m barrels of oil per day and growing.' By contrast, Long points out that the UK is the only large global oil producer to have deliberately cut its production in recent years, signalling the long-standing net-zero legacy left by Carney. 'It means that while Canada's oil and gas industry is ramping up production under Carney, the UK remains aligned with the anti-oil and gas ideology he promoted when he was the governor of the Bank of England,' he says. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
