Blogging from the Highlands of Scotland until I return to the Murcia region of Spain towards the end of January 2018 for about a month
'From fanaticism to barbarism is only one step' - Diderot

Wednesday, 24 June 2009

Governor of Bank of England rubbishes Government's economic policy

The Governor of the Bank of England, Sir Mervyn King, seems finally to have lost patience with the Government and become willing to say in public precisely what he thinks of Darling and Brown's strategy for getting the country's finances back in ... well not exactly in some kind of order, because that's going to take a VERY long time ... but at least make a sensible start on reducing the frighteninlgy-high budget deficits. Here's what he said this afternoon before a House of Commons Treasury select committee and it's pretty explosive stuff:

"We are confronted with a situation where the scale of deficits is truly extraordinary. This reflects the scale of the global downturn, but it also reflects the fact that we came into this crisis with fiscal policy on a path that wasn't sustainable and a correction was needed."

"There will certainly need to be a plan for the lifetime of the next parliament, contingent on the state of the economy, to show how those deficits will be brought down, if the economy recovers, to reach levels of deficits below those which were shown in the budget figures."

The extent of the rift between Threadneedle Street and Downing Street is clear from this FT report on today's meeting, too.

Quite extraordinary and one imagines that the Prime Minister and the Chancellor of the Exchequer cannot have enjoyed learning of what Sir Mervyn had said. He is of course quite correct and it needed to be said - one presumes that there will be consequences of one kind or another for him, tempered only by the fact that Labour is now very weak politically, even if whilst Brown remains Prime Minister he still retains a certain, now rather shabby, aura of power. Today, too, at Prime Minister's Questions, David Cameron tore into Gordon Brown and his usual spin in a manner that was most satisfying to behold.

The Governor of the Bank of England is not the only senior establishment figure to have seemingly lost whatever faith they may have once had in the 'Dear Leader', if the audience Her Majesty the Queen granted to Sir Mervyn King in March last is a guide.

Is Gordon Brown set to go down in history as the worst Prime Minister this country has ever had? I've thought he was complete rubbish ever since his first budget was announced in 1997 and it gives me absolutely no pleasure that my fears at the time that Labour's latest period in government would end, sooner or later, in financial ruin for the country have become a frightening reality. So the answer to that question is "Yes", at the very least as far as my own lifetime to date is concerned.


  1. Gordon is certainly the worst PM I can remember, mainly because he is an utter and complete liar and seemingly devoid of any ability to understand when he has gone too far. The depths we are in and will reach are now nearly as bad as back in the 70's and we started from a significantly higher point.

    Mervyn King must have thought long and hard before saying this. The problem is that Gordon will only see it as a personal insult to him rather than a large shot across the bows which he should act on in a financially correct manner.

    He will thus try and stab Mervyn in the back rather than either taking his advice or confronting him as a "man of courage" would.

  2. Well I'd call him a 'dissimulator' rather than a liar ;) because I think that at root he remains what he has always been - a hardline socialist bent on furthering his socialist ideals by any and all means and one of the methods I think he has chosen is to attack the long-term inter-generational wealth of the middle classes by effectively destroying the private sector's pensions. The whole objective is to drive more and more people into the hands of the State; New Labour have tackled the other end of the spectrum by putting into place a whole raft of benefits and credits, all designed to buy voter loyalty and keep them in power. The idea that 'New Labour' was somehow more friendly toward business was a myth – it was necessary to put across a reasonable image in order to gain power, and that power once acquired has been used for purely socialist goals. He still thinks that he can win the next election with his fantasy-economics and I don't, quite honestly, discount the possibility that he might pull it off – I won't be convinced until the results of the next election are known. I think Labour will fight an extremely dirty election next time around (making the LibDems look like mere amateurs in that area). I really must stop as my blood-pressure must be mounting ;)


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