Saturday, 23 May 2009

It is never enough

Brown is upset with the Bank of England. Apparently, Mervyn King is being a little too pessimistic about the prospects for the UK economy:

From today's FT:

The Bank of England’s gloomy outlook for the economy has stoked tensions between Gordon Brown and Mervyn King, the Bank’s governor, with senior government officials complaining that the central bank is handing ammunition to the Tories.

There is growing irritation in Downing Street and the Treasury towards Mr King. The prime minister and Alistair Darling, chancellor, have been left fuming by the governor’s interventions, most notably after his downbeat assessment this month of the economic outlook, a viewpoint pounced on by the Conservatives.

Such ingratitude. The Bank of England has cut rates to zero; compromised its balance sheet to support failing commercial banks and offered almost unlimited credit to the UK government via the Asset Purchase Scheme. For Brown, however, it is still not enough. He wants to Bank of England to sing a sweet song about UK growth prospects.

If anyone had any illusions about Bank of England independence, then Brown's little tantrum should dispel them.


Anonymous said...

The economic measure can never 'be enough'. If one guesstimates that about 60% of the turnover of some of the world's biggest economies have been based on unsustainable (bubble) credit for maybe ten years or so, a few trillion cannot cover the gap, but only put off the eventual slowdown to a total economy of half or less than half of its end-2007 size. That's the real tragedy of 'not enough'!

B. in C.

Jo said...

Brown (the great looter of the future) doesn't seem to get it.

The world has changed.

Gordon's upset - do we care? Maybe not so much.

Anonymous said...

Did anyone actually think the BoE was independent?