You know how I said the other day that Bank of England Governor Mark Carney could step in and halt the pound's slide? Hold that thought. Theresa May seems determined to do away with the central bank's role altogether, along with other measures that can be called at the very least surprising coming from a government that claims to be pro-business.
OK, I am perhaps exaggerating on the central bank issue, but not that much. Judging by a speech she gave on Wednesday, May has no problem stepping on two fundamental principles that have underpinned London's fantastic ascension as a financial center: central bank independence and openness for business.
In her speech to the Conservative party conference, May slammed the extraordinarily relaxed monetary policy for making the rich richer and the poor poorer, because the low interest rates have been pushing people into buying assets.
"While monetary policy with super low rates and quantitative easing have provided emergency medicine, we have to acknowledge some of the bad side effects. People with assets have got richer, while people without have not," she said.
So far so good. This point has been made by various people over the years. More than two years ago, I suggested that asset price inflation should be included in the official inflation figures to give a truer picture of price rises.
Even Carney has admitted that there is a limit to what monetary policy can do, and that limit is getting close.
But May went a step further in her speech: "A change has got to come, and we are going to deliver it because that's what a Conservative government can do," she said.
The U.K. Prime Minister has become quite adept at uttering statements that sound impressive but don't really reveal what her intentions are. The first was the now famous "Brexit means Brexit".
This makes markets nervous. With the statement about the central bank, it is not clear whether she intends to fire Carney and take control of the Bank of England, or whether she just made a vague promise to deal with the situation somehow.
The idea that Carney might lose his job started as a joke this morning on Twitter after an unprecedented attack on companies that hire foreign workers in the U.K. by Home Secretary Amber Rudd late Tuesday.
Rudd said businesses in the U.K. will be forced to publish lists of the foreigners they employ in order to "prevent migrants taking jobs British people can do."
Some were quick to point out that one of the most high-profile foreign hires in the U.K. is Carney, who was the head of the Bank of Canada before taking over at the helm of the Bank of England in July 2013, the first foreigner to run the U.K.'s central bank since it was created in 1694.
As usual, sarcasm started flowing on Twitter soon after Rudd's announcement. One London-based foreign journalist expressed relief that a delay in being allowed back into his company's building after lunch turned out to be a technical glitch, rather than a government edict.
@SpiegelPeter Yea, that's going to be the excuse. At the beginning of the purge.— Lorcan Roche Kelly (@LorcanRK) October 5, 2016
"I'm sorry, did we accidentally deport you? Must be a bug."
Still, the government's protectionist, inward-looking stance does not sit well with London's global financial center status. On a more sinister note, attacks against foreigners, particularly eastern Europeans, were already rising after the Brexit vote. Such rhetoric from the government itself is unlikely to help put the genie of xenophobia back into the bottle.
And while the Prime Minister's speech was music to the ears of the impoverished Britons who voted for Brexit, there is no escaping the fact that it revealed a strongly interventionist, almost anti-business stance.
More than 20% of the employees in financial services, Britain's star business sector, are non-U.K. citizens. These people, along with software writers, designers, digital economy specialists, biotech experts, and other highly skilled professions, shape the businesses that feed the government's coffers.Talented employees are fought over by companies all over the world. Losing them would make the U.K. smaller, not bigger, on the international scene. Populism may look good on the surface, but dig deeper into its consequences and it's obvious it is never a good idea.