Governor of Gloom: Patience runs out with Mervyn King

A most political governor: Mervyn King was accused of siding with the Tories when Gordon Brown was in power.
A most political governor: Mervyn King was accused of siding with the YTories when Gordon Brown was in power.
Ian Dunt By

Patience well and truly ran out with the governor of the Bank of England today, after he delivered another gloomy and uncertain appraisal of the economy.

The press conference came as the Bank downgraded its May growth forecast from 0.8% to zero.

Sir Mervyn King was mocked by journalists and MPs when he was forced to justify the latest set of over-optimistic figures.

"We don't pretend to have a crystal ball," he said.

"We will get back but it's impossible to know [over] what time period.

"We are in no position to make any accurate forecasts about what will happen in the UK".

Analysts were particularly appalled by the inflation report from the Bank of England which seemed uncertain about most of the issues affecting retail prices.

There was a glimmer of light when the Bank revealed inflation was expected to hit the government's two per cent target at the end of the year, somewhat earlier than expected. The reduction should ease the squeeze on living standards.

But elsewhere the governor was mocked for his gloomy press conference. His comment that the British economy should take inspiration from Team GB's gold-winning athletes was met with condescension, while his comment that he "never comment[s] on political developments" was laughed at.

The governor has played a subtle political game during his time at the Bank, not least during the tail end of the Labour administration when he was attacked by Gordon Brown's allies for effectively espousing the Conservative's economic programme.

His connection to George Osborne's economic policy is now damaging his own personal brand, as the economy sinks in to a double dip recession and both Bank of England and market predictions of growth prove to be drastically overestimated.


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