MERVYN KING believes interest rates in Britain will stay lower for longer than the markets expect, according to private conversations he had with a senior American economist.
David Hale told Australian television last week that at a private meeting the Bank of England governor had told him that the tax increases and spending cuts that would be needed would be so unpopular as to keep the party that introduced them "out of power for a whole generation".
After the meeting with King, on March 11, Hale attended a drinks party and a breakfast meeting the following morning. Both gatherings were off the record but, according to people present, he also said that King believed that to compensate for the fiscal pain ahead, the Bank would need to keep interest rates extremely low.
Bank rate is at a record low of 0.5%. "The impression was that rates would stay low for the next four years," said one of those present. The Bank has confirmed that King and Hale met but refused to say what they discussed.
More from the source: Bank rate 'will stay low for four years' - Times Online
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For fooks sake, who made that guy the Gov of BoE?
David Hale told Australian television last week that at a private meeting the Bank of England governor had told him that the tax increases and spending cuts that would be needed would be so unpopular as to keep the party that introduced them "out of power for a whole generation".
After the meeting with King, on March 11, Hale attended a drinks party and a breakfast meeting the following morning. Both gatherings were off the record but, according to people present, he also said that King believed that to compensate for the fiscal pain ahead, the Bank would need to keep interest rates extremely low.
Bank rate is at a record low of 0.5%. "The impression was that rates would stay low for the next four years," said one of those present. The Bank has confirmed that King and Hale met but refused to say what they discussed.
More from the source: Bank rate 'will stay low for four years' - Times Online
-------------------
For fooks sake, who made that guy the Gov of BoE?
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