At the press conference to mark his valedictory inflation report, Mervyn King, the governor of the Bank of England, not for the first time asserted that “a recovery is in sight”. I nearly fell over laughing when I heard him say that. Here we go again. Some growth is better than none, I suppose, and you can always draw a straight line between two data points, but that doesn’t constitute a recovery – far from it. What does King mean by a recovery? Growth of 0.2 per cent a quarter wouldn’t cut it. Growth of 5 per cent or even 3 per cent doesn’t seem to be on the cards. I would be surprised to see growth of more than 1 per cent this year and next, if we are lucky. Long gone are the heady days under Alistair Darling when the economy grew at an annual clip of 2.5 per cent, rising for five quarters in a row from the third quarter of 2009 to the third quarter of 2010.
This looks like King and George Osborne’s lost decade. Of course the governor will head off to the lucrative lecture circuit in a month or so and try to blame everyone else for his failings, including Gordon Brown, but the facts speak loudly. Even by the start of September 2008, a couple of weeks before the fall of Lehmans and a month before the failure of the Royal Bank of Scotland (RBS), King had not spotted the greatest recession of our lifetime. He had no credible proposals to bail out the banks; said that he hesitated to intervene because of “moral hazard”, and apparently was taken by surprise when RBS failed. He then compromised the independence of the Bank of England by supporting what turned into the failed fiscal austerity policies of the coalition government.
daily alternative | alternative news – HaHa Mervyn King say there’s a recovery in sight