Thursday 20th September 2007
Mervyn King, the Bank of England governor, faced the music today when he met with MPs for what looked set to be a tough grilling.
Mr King met with MPs this morning to discuss the Bank's latest inflation report, but the topic of conversation was expected to turn to the Bank's handling of the issues of the day - the Northern Rock crisis, stormy financial markets and the global credit crunch.
Yesterday the Bank announced a turn-around on the credit crisis - announcing a move to channel £10 billion into the financial markets - which many analysts suggest is a complete back-track on the bank's earlier policy and could be a sign that King is bowing to political pressure.
He defended the move in parliament today, saying that the decision was not influenced by pressure from the government, and should not undermine the independent image of the Bank.
Mr King went on to tell the House of Commons committee that the Northern Rock crisis was down to legislation that had prevented the central bank from acting more quickly, and that he add also wanted to invest in Northern Rock covertly, to prevent panic, but been unable because of recent market-abuse regulation.
Northern Rock's share price dropped to an all-time low yesterday, after rumours that a low bid might be made for the bank or that the necessary fund might not be found for a takeover by a rival bank or private equity firms.
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UK economy
While today’s decision by the Bank of England MPC was literally a no brainer it does not help the thousands of home owners who are struggling to make ends meet. As we read another report from the... 
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