Ben Chu: There are worse crimes than exasperating the Treasury

Can the Governor be exasperating? Certainly. Worse, he can also be wrong

Share
Related Topics

Is Sir Mervyn King a closet Conservative? Many Labour figures believe so. They cite the Bank of England Governor's support for the Coalition's deficit reduction policy and contrast it with the fractious relationship between Sir Mervyn and the previous government.

But these critics ignore the WikiLeaks revelation that Sir Mervyn warned the US ambassador to London of the "lack of experience" of George Osborne and David Cameron before the last election. It would be odd for a partisan Conservative to brief secretly in this way.

Can the Governor be "stubborn and exasperating" to politicians, as Alistair Darling complains in his memoirs? Certainly. Worse, he can also be wrong. Sir Mervyn's repeated warnings about "moral hazard" during the financial crisis were unhelpful. What was needed was action to stem the panic, not lectures about dangerous incentives. The Governor's preoccupation with the inflation threat in 2008, when the real danger was a severe recession, was also a mistake.

But he can also be right. The Governor has been a powerful advocate of breaking up the "too-big-to-fail" banks. And his dovish stance on interest rates this year has been vindicated by the sharp slowdown in recent months.

The job of the Governor is not to ingratiate himself with ministers, but to be independent. If he gets this crucial responsibility right, he can be as stubborn and exasperating as he pleases.

React Now

iJobs Job Widget
iJobs General

Executive Assistant - London - up to £40,000 + bonus

£33000 - £40000 per annum + bonus + benefits: Ashdown Group: Executive Assista...

Social Media Director (Global) - London Bridge/Southwark

£45000 - £50000 per annum + Benefits: Ashdown Group: Social Media Director (Gl...

HR Advisor - 6 months FTC Wimbledon, SW London

£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

IT Manager - Tolworth, Surrey - £40,000

£37000 - £40000 per annum: Ashdown Group: IT Manager - Tolworth, Surrey - £40,...

Day In a Page

Read Next
 

The daily catch-up: Neigh-Drama Obama, changing welfare and how to tell if you are a journalist

John Rentoul
 

i Editor's Letter: Only a game? Far from it

Oliver Duff Oliver Duff
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

Hollywood targets Asian audiences

The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

Grindr founder Joel Simkhai: 'I've found love on my dating app'

Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

Is it time to ditch autocorrect?

Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
10 best girls' summer dresses

Frock chick: 10 best girls' summer dresses

Get them ready for the holidays with these cool and pretty options 
Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

Westminster’s dark secret

Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

A History of the First World War in 100 Moments

Dulce et decorum est: a life cut short for a poet whose work achieved immortality
Google tells popular music website to censor album cover art in 'sexually explicit content' ban

Naked censorship?

The strange case of Google, the music website and the nudity take-down requests
Howzat! 8 best cricket bats

Howzat! 8 best cricket bats

As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

David Luiz falls from leader figure to symbol of national humiliation

Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil