Palgrave Macmillan, £70. Order for £70 (free p&p) from the Independent Bookshop: 08430 600 030
Inside the Bank of England, By Christopher Dow
Wednesday 27 March 2013
The economy is stagnating; the pound is falling; unemployment is climbing; the budget deficit is soaring; the prime minister is dithering – and the Treasury and the Bank of England completely disagree about what is to be done.
Sounds familiar? This was Britain in the 1970s, a decade that saw the country experience the three-day week, a rescue loan from the International Monetary Fund, and the "winter of discontent" – followed by the equally fraught early years of the Thatcher government.
It was a period of economic failure that has affected politicians of all colours for a generation. Yet it is hard to catch a feeling for what it was like to be trying to hold things together, which is why a set of memoirs from Christopher Dow, chief economist at the Bank of England 1973-84, deserve a wider welcome.
Two things stand out. One is the set of pen-portraits of officials and their interaction with the politicians. There was Margaret Thatcher telling Gordon Richardson, governor of the Bank, that he should not spend "all those lovely dollars" supporting the pound on the exchanges. "Would you like the rate to go down?" he asked. "Certainly not. I have made that very clear," she replied.
The other is the way in which things that seem inevitable now appeared very different at the time. Before the IMF bail-out, officials in the Bank seemed surprised that there should be a run on the pound. Dow himself was sceptical of the value of monetary targets, the principal device used to rebuild monetary discipline from the late 1970s onwards. "It will be evident," Dow writes referring to targets, "that much that was said and done was stupid."
Indeed, the final part of the memoirs chart how most economists opposed government aims, not just over monetary but also fiscal policy: cutting the deficit despite the global recession of the early 1980s. Yet that period – rightly or wrongly – embedded a set of economic policies that carried through for the next 25 years.
Books And it is whizzpopping!
Arts & Ents blogs
- 1 Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
- 2 Novel Scarlett Johansson tried to ban, Grégoire Delacourt’s The First Thing You See, to be published in UK
- 3 A pint of water every day is the key to losing weight, scientists say
- 4 Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
- 5 Carol Vorderman reveals she is 'covered in burns' after she fell off her treadmill while running naked
Game of Thrones season 6: Jon Snow theorists believe the Stark may have a twin sister
Friends fan comes up with horribly dark alternative ending to sitcom
Artist takes LSD, draws herself over different stages of the 9-hour trip to show its effects
Dismaland: The artists doing cooler things than Banksy at his 'bemusement park'
Novel Scarlett Johansson tried to ban, Grégoire Delacourt’s The First Thing You See, to be published in UK
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs