Wednesday, 15 September 2010

Mervyn King at the TUC

Stephanie Flanders provides a fair analysis of Mervyn King’s speech to the TUC. She correctly describes the Governor as being ‘factually accurate but a little disingenuous’ for claiming that the ConDem’s plan to reduce the deficit is ‘a more gradual fiscal tightening than in some other countries’.

As Stephanie points out, no other major economy is implementing an austerity package that compares with the speed and severity of the ConDem plan.  Yes, Greece and Ireland are going further (not by much) but their fiscal position cannot credibly be compared to that of the UK.

Interesting also to hear the Governor refer to his recent meeting with the STUC. Our regular meetings with members of the Monetary Policy Committee are fascinating affairs and you do get the impression that members genuinely appreciate hearing the trade union perspective on developments within the labour market.

Just a shame they don’t always act on the intelligence we provide. It’s remarkable to recall that one member of the Committee was calling for an increase in interest rates as late as September 2008…

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