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.
game of thrones reviewWarning: spoilers
Arts & Ents blogs
- 1 If I were Prime Minister: I'd give tax cuts to the rich, keep Trident, and get my football team wrong
- 2 Italian police 'reveal' what Jesus looked like as a young boy
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
- 5 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
Eurovision 2015: What date is the song contest and who are the favourites to win?
Game of Thrones, season 5 episode 4, review: Sansa in danger of becoming another footnote in Westeros' bloody history
Jar Jar Binks is going to die unceremoniously in Star Wars: The Force Awakens
JK Rowling is 'really sorry' for killing off one of your favourite Harry Potter characters
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally