They used to say that the merest twitch of the eyebrows of the Governor of the Bank of England was enough to scare financial markets back into line.
But in recent weeks, Sir Mervyn King has not so much been twitching his eyebrows as shouting his opinions from the rooftops.
First there came the news that Sir Mervyn had made a surprise defection to the doveish camp on the Bank’s rate-setting Monetary Policy Committee, voting for more stimulus for the ailing economy. The strange thing was that only weeks before, Sir Mervyn had seemed to suggest that the ability of quantitative easing to do any good had been exhausted.
Then, making his final appearance before the Banking Standards Committee, Sir Mervyn aired the bombshell opinion that the management efforts to restore the semi-nationalised Royal Bank of Scotland to health were failing and that, for the good of the wider economy, the bank ought to be broken up without delay. He described the present arm’s-length public ownership arrangements for RBS, in very un-central banker language, as “a nonsense”.
And this week we were treated to a rare broadcast interview with ITV in which the Governor casually announced that sterling had fallen enough, which sent the pound surging on the foreign exchanges. It was quite a contrast with Sir Mervyn’s remarks last year, when he made it perfectly clear he believed the value of sterling was too high. All this most probably reflects the fact that the clock is fast running down on Sir Mervyn’s long tenure at Threadneedle Street. He hands over the reins of power in July to the feted Canadian central banker Mark Carney. Sir Mervyn knows that in just three months, people will suddenly lose interest in his views, as they shift their attention to the new boss.
If Sir Mervyn has something to say, he must unburden himself now. But it is possible to detect something else in this somewhat erratic pattern of behaviour. Could it be a concern over his legacy, perhaps even a nagging fear that history will not be as kind to his Threadneedle Street reign as he believes it deserves?