Belfast Telegraph

Tuesday 21 October 2014

Final return of King could be damp squib

When Mervyn 'BB' King comes to town, everybody wants a piece. Bad luck then for those who wanted a one-on-one with the boss of Threadneedle Street.

The Bank of England governor wasn't giving any interviews before yesterday which might have lent colour to his visit to Belfast, lest he let slip anything untoward about the Northern Ireland economy or UK monetary policy.

Nor did he say anything out of the ordinary in his speech at the CBI dinner in Titanic Belfast other than remark how impressed he was that politicians here are willing to work together for the economy.

It's a shame he wasn't more risque because, on his last trip of the regions and to Northern Ireland as the man in charge of the UK's purse strings, you would have hoped the old boy would have stood in front of the business leaders, taken a long sup on his beverage of choice (perhaps a sherry) and let rip, safe in the knowledge that his time in the job is nearly up.

Maybe he would have had a go at David Blanchflower, the ex-Monetary Policy Committee member who not 24 hours earlier was in Belfast and who has been a very vocal critic of Mr King since breaking free from the central bank in 2009.

Mr Blanchflower believes the central bank is doing regions such as Northern Ireland a disservice by keeping inflation as close to the golden number of 2% as it can.

By manipulating interest rates to control rising inflation, he reckons it will be forced to raise rates well before the wider economy has had a chance to recover properly and a country mile before the Northern Ireland economy has recovered.

Instead of rates, he wants Mr King et al to follow the US Fed's lead of trying to maintain an unemployment rate of 6.5% and maybe even try to ally every borrower's fears by confirming it won't raise rates soon.

In anyone's game, that's doesn't sound a good way to kickstart the lending part of the economic cycle but even if Mr King did agree with his critical ex-colleague, he wouldn't be able to do much about it given his hands are not so much tied as manacled to government policy of a 2% inflation target.

Mr King was never going to throw caution to the wind, even if it was his last trip here.

Still, it would be nice to know what he's really thinking. As this piece is written before the dinner takes place, we promise to at least try and have a word.

Go on Mervyn, break loose.

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