Outlook: Eddie unscathed in the lions' den

Click to follow
The Independent Online
IN THE old days, it was Labour Party leaders who had to answer to the trade unions, and a rough time they usually had of it too. Now that control of monetary policy has been given to an independent Bank of England, it's the Governor, Eddie George they want to hold to account. So Eddie yesterday went to Blackpool knowing he could give the brothers nothing except the hope that interest rates have at least peaked. He must have expected a roasting.

In fact he emerged remarkably unscathed. The text of Eddie George's address to the Trades Union Congress contained no surprises. Delegates had been agitating for a cut in interest rates to ease the misery for their members. But it was plain that the Governor of the Bank of England was never going to deliver.

Mr George laced his message with sympathy and understanding but it remained crystal clear that the central goal of monetary policy will continue to be hitting the 2.5% inflation target.

What was most interesting was the Steady Eddie should have felt the need to book his spot at the Winter Gardens at all. The Trade Union movement is now largely without influence in Government circles. Even under a Labour administration it remains far removed from the seat of power. Just how far removed the TUC will discover tomorrow when the Trade & Industry Secretary Peter Mandelson addresses the conference.

Those searching for something warm to cling to amidst the cold comfort on offer from the Governor may have been heartened by his pledge to cut rates just as remorselessly as he has put them up should the MPC be in danger of undershooting the inflation target. But since that, to use the Governor's own words, is still not the most likely outcome despite last month's dip in inflation, the brothers can do little more than continue to live in hope.