Blanchflower attacks King over recession

A former member of the powerful Monetary Policy Committee has recently launched a verbal attack on the governor of the Bank of England, Mervyn King, according to a recent report.

David Blanchflower, who quit the MPC last year, slated Mervyn King for failing to spot obvious signs about the recession earlier.

He lashed out at King for failing to foresee the recession, and accused him of being blind to the crisis that was facing the economy, leaving it too late to put measures into place.

Blanchflower said that King ruled over an institution that was ‘hobbled by group-think’, and said that the Bank of England, under the rule of King, failed to spot obvious signs last year that the nation was on the brink of recession.

This, he said, resulted in the central bank failing to act quickly enough to minimize the effects of the recession, leaving it too late to cut interest rates in time.

In a recent interview Blanchflower stated: ‘Clever as Mervyn King may be, he missed the crash and the subsequent recession, and hence, so did the consensual MPC on which I sat. In August 2008, the MPC’s quarterly inflation report did not even contain the word “recession”; it saw the economy standing still over the next year. I very nearly quit the committee at that point. In an interview, I called the forecast “wishful thinking”. Mervyn called me into his office to admonish me for that one.’

He concluded with a scathing verbal attack on the governor, stating: ‘Governor Mervyn King, the old iron fist of the Bank of England, with his hawkish views on rates, dominated the MPC.’

His views have been mirrored by some other officials, some of whom have claimed that King has too much power and fails to listen to alternative points of view.

Tags: mrvyn king, david blanchflower, recession, mpc, bank of england