Comment: Carney may have painted himself into corner I HAVE always thought that the wild card in appointing Canadian Mark Carney to head of the Bank of England was his experience as a central banker in a country that is devoutly federalist. Carney comes from a political culture where fiscal and monetary policy always has to reflect the divergent needs of Canada's constituent provinces, not just those of Ottawa. So it comes as no surprise that Carney has just given an interview to a regional newspaper in which he promises to take into account the level of unemployment in places beyond London before deciding to raise interest rates above their 0.5 per cent floor. Under his "forward guidance" doctrine, the Bank promises not to increase rates until UK unemployment falls below 7 per cent - not expected till late 2016. "A recovery that is only existent in the south east of England is not ultimately going to be a sustainable recovery for the United Kingdom as a whole," Carney told the newspaper. However, his federal approach is about to be sorely tested. UK house prices rose for the fifth straight month in September, according to the Nationwide, with London prices already hitting record highs. London property prices rose by a double-digit percentage in the three months to September. As a result, the markets are pricing in a rate hike long before 2016. A worried Chancellor George Osborne (who chose Carney) has just asked the Bank to monitor the UK government's controversial Help to Buy housing subsidy that is driving property inflation. This gives Carney a dilemma. Does he recommend an end to the Help to Buy programme in order to deflate property prices? Or does he put up interest rates? The Bank's financial policy committee will pronounce on the housing subsidy this Thursday. Ed's energy price freeze needs perspective ED MILIBAND'S promise to freeze consumer energy prices for 20 months predictably knocked billions of pounds off the share value of the big utilities. Capping retail prices for consumers while wholesale prices can still move is daft and the markets know it. However, let's put matters into perspective. Shares of UK energy companies have performed much better than their main European rivals in recent years, as the latter suffered political interference and competition from subsidised renewables. Even taking into account this week's fall, Centrica and SSE shares were still hovering around ten-year highs. Meanwhile, continental rivals such as E.ON have wallowed at near all-time lows this year. In fact, equity prices in the energy utility sector in Europe are down a third over the past two years, though investors are still holding for the security and the dividend. European politicians (right and left) are well ahead of Labour in using energy companies as tools of social engineering - 17 out of 27 EU members fix energy tariffs. In France, households are favoured over industry in energy price regulation - clearly Mr Miliband's direction. But in Germany, industry is favoured over consumers, who pay more for their household electricity than Brits. Of course, Germany is enjoying record employment, so people can afford to pay those bills. Meanwhile, expect the major UK energy firms to go on an acquisition spree to ensure they have sufficient gas and electricity supplies to insure themselves against a Labour price freeze. That is likely to hit dividends.