Anyone else watching Mervyn King's speech?

merlinthehappypig

Got to be one of the most sensible speeches I have heard on the UK economy in a long time.

We need to borrow less, save more, watch inflation which he has said could rise steeply and that house price inflation will be 'less buoyant'.

Listening to him you wouldn't assume that there will be any interest rate cuts, let alone steep cuts. He's certainly making the point that inflation is the key responsibility of the bank, not house prices (sorry Gordan and Alastair)

I reckon he has been reading these forums from the good sense he is talking.....................

Zammo

He's for the boot then, Gordo wants more debt and cheap borrowing to keep his miracle economy alive.

subjecttocontract

Mervyn King ?

Surely he's lost all his credibility after the Northern Rock fiasco ?

Sooner he goes the better.

The King is dead long live the next Governor of the Bank of England

dad-of-4

couldn't care less what merv has to say, it's just more profits for the banks,.

Pobby

All a load of twaddle.If you had any brain at all you would understand that you have to save a bit if you can afford to do so.Realise that lenders have been taking stupid risks in their lending.House prices are way above where they should be.The whole,detestable business has been overseen by Gordie and now the !!!!!! is hitting the fan.As for ``real`` inflation,well that is anybodys guess.

rae1202

gordo's statement this morning said that uk economy can cope with the turbulance.......................so you know we are all stuffed

aardvaak

Zammo wrote: »

He's for the boot then, Gordo wants more debt and cheap borrowing to keep his miracle economy alive.

Surely your not one of the ones wanting a cut! Why?

Generali

I don't think you can blame the BoE for this mess. Unlike any other developed nation that I know of, there's no law that allows the Govt/Central Bank to step in and run a failing bank which is what should have happened once it was clear that NRK was effectively insolvent.

Also, the MPC has been charged with a very specific poicy goal which they have met more successfully than I ever thought they could, so far at least.

poppy10_2

http://www.afxnews.com/about488/index.php?lg=en&c=00.00&story=2276705

He made it clear he isn't too bothered about inflation any more, and the MPC's remit has changed from keeping inflation under control to making sure rich bankers don't lose any money:

"It is possible that inflation could rise to the level at which I would need to write an open letter of explanation, possibly more than one to the Chancellor," he said.

"Although there is little we can do now to avoid some rise in inflation this year, the task of the Monetary Policy Committee is to ensure that it is short-lived," said King.

"There is a risk that weaker activity and lower asset prices could result in another round of losses for banks and a further tightening of credit conditions."

Sterling's 10 pct fall since last August against a basket of currencies will help, said King, who also noted that financial markets are pricing in a significant probability of a further decline in the exchange rate this year.

tr3mor

subjecttocontract wrote: »

Mervyn King ?

Surely he's lost all his credibility after the Northern Rock fiasco ?

Sooner he goes the better.

The King is dead long live the next Governor of the Bank of England

You're getting Mervyn King mixed up with Gordon Brown!

Pobby

Given the circumstances I think the boe have done an Ok job given the criteria they have to work with.Poor old Merv has had a lot to put up with.The way inflation is measured(pretty much the same goes for unemployment figures) is a massaged,make it look right,set of data to apply the figures to.

In real terms, inflation is well beyond the official figures.Merv has a brief to curb it.Well by tradition,that means he has to raise interest rates.Hmmmm,wouldn`t be wanting to do that as that puts more grief on an
already indebted society.So where does he go from here?

Do we end up with a full scale recession?Hope not,been there done that but I cannot see an easy way out of this.If personal debt(mortgages included) are as high as they seem,something has to give.Market corrections always happen.