25 June 2009: Mervyn King – Governor of the Bank of England comments on the economic shambles – Jun 2008-9
King made a shocking charge that “The “Bank of England” had not been party to discussions about Alistair Darling’s plans for the reform of banking regulations.” He also said that the tri-partite regulatory regime designed by Balls and Brown, “was a mess”.
Recent figures showed that Britain has the biggest budget deficit in the world. The global crisis had government borrowing at £20 billion in May, which means the government is overspending by nearly £30 million an hour.
Gordon Brown is spending way beyond the Nation’s means and forcing our children into debt at an unheard of rate and he boasts that he is going to spend, spend, spend.
King testified that the UK government needed to cut spending much more dramatically than is currently planned or the Country faces financial ruin. But Brown is desperately hoping for a recovery (as Darling confidently predicts) to save him in time for a general election.
News from the “Organisation for Economic Co-operation and Developments” not encouraging.
In a statement recently released it said “Britain is in severe recession and it is predicted the UK economy will shrink by 4.3% in 2009/10.
Under a model devised by Gordon Brown when he was chancellor, consumer prices index (CPI) inflation should have been kept at 2 per cent.
If the target was missed by more than 1 per cent, the governor of the Bank of England was required to write an open letter to the Chancellor of the Exchequer explaining why it had been missed and what needed to be done to resolve matters.
Mervyn King dispatched 14 of these letters from April 2007, always because CPI has exceeded the target by more than 1 per cent. The Chancellor did nothing.
Mervyn King & Mark Carney caricature
The outgoing but less outgoing governor of the London based Bank of England hands over the reigns to the younger photogenic ‘saviour’ of the Canadian economy.
The British Government hoping to inject new ideas and impetus in a flagging UK economy plump for the nearest thing the bankers have to a rock star.
Balance of trade figures going in the wrong direction, inflation still out-stripping wage rises and growth turgid it remains to be seen whether they made the right choice. Created for Financial Director Magazine.