“Asleep at the wheel” has been the accusation levelled at central bankers such as the Bank of England (BoE) over the financial crisis of 2008. But eager to prove its new found vigilance, the BoE yesterday tightened its controls on bank credit by announcing changes to its counter cyclical buffer (CCB).

The CCB aims to ensure banks are considered in their lending; it requires that banks increase their capital by 0.5% by this time next year and, all other things being equal, to 1% by November 2018. That would equate to £11.4bn extra capital required to back loans in the UK. All very prudent and exactly the sort of pro-active approach that central bankers should implement in boom times.

Yet politics suggest that we are still in a fiscally restrictive environment. Witness yesterday’s British Social Attitudes survey, which has a section entitled “A backlash against austerity”. Think what you like about austerity but it isn’t the stuff of boom times. So what’s the BoE worried about?

A very low savings rate is at the heart, coupled with a material increase in consumer lending through credit cards and car loans. But in an economy growing at below 2% with declining real wages, what are the Bank’s concerns? Most recent public statements over the path of interest rates centre on whether to reverse last summer’s rate cut. But Carney’s raising of the CCB must – even if only at the margin – slow the start and path of rate rises. And 0.25% or 0.5% is the discussion; the UK is not about to replicate the US rate cycle where short rates are up 1% since 2015.

The BoE aims to take a leisurely approach to the CCB increase. Like many of Carney’s initiatives it may be that the message is more effective than the action; he sees some risks but there’s no need to rush; time may mean these risks just disappear anyway. Brexit headwinds remain a challenge for UK policymakers and that is evident in the public tussle over rates with MPC members. It is difficult to view the CCB action in isolation. There is a suspicion that the BoE may just be fighting the last war and not the next. And the orders from the generals are contradictory.

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