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Business Comment

Sean O'Grady: Yes, it was embarrassing, but it was scarcely controversial


Has Mervyn King had his very own Gillian Duffy moment? No. For one thing, the Governor, I assume, made the usual careful preparations to make clear that his comments were strictly off the record. Unlike Mr Brown, his trust was betrayed, rather than compromised by misadventure, and that is a shame.

Like other senior Bank officials, Mr King is not a Trappist. He does speak, occasionally, on a background basis to professional economists and, yes, journalists too. It helps us understand what the Bank is trying to do, and maybe they learn a little about whether their polices are understood or working, or both.

In this case, Mr King's comments, though colourful, are hardly controversial, and make the point he has been banging on about for months now; we need a credible plan to fix the deficit. He ought to be allowed a little poetic exaggeration.

The next government will indeed have to impose painful spending cuts and tax rises. Four or five years hard slog under any party (or parties) will be unpopular with voters who have enjoyed living beyond their means. By-elections will be lost, there'll be rebellions in the Commons, strikes, protests, unrest and a big job of explanation at the election after this one. Britain will endure a few years of agony. Deep down, we all know that.

Still, it is embarrassing for the Bank to be caught in this way, even talking about politics in the abstract. All public speeches and interviews are banned during the election campaign, for obvious reasons, and the next meeting of the Monetary Policy Committee to set interest rates has been moved to after polling day. Obviously that degree of purdah is not quite enough.

Maybe the Bank should just pull the phones out of the sockets, shut those big imposing doors, and go on holiday for a few weeks.