Bank Of England Move To Calm Markets
As the UK stock markets fills with rumours that the Bank of England is set to move interest rates higher, Mervyn King has stepped in to try and take some heat out of the situation. Sitting in front of a Commons Select committee, investigating the credit crunch and the ongoing economic woes of the UK, King was asked a number of questions from the future direction of the housing market, the inflation trend and forecasts for the price of oil. So what did Mervyn King have to say?
In this world of spin and subtle suggestions many were amazed to see the Governor take the floor and remark that with the best will in the world he was not able to predict the future. Like so many in the Bank of England he has been surprised by the speed and severity of the downturn in the UK economy, the strength of inflation and the problems in the housing market.
While some would say that King’s comments were not helpful at least he was honest and the stock market can take strength from the fact that he seems to be telling the truth. When the time is right we should get an indication of the future, but thankfully the Governor is not in the game of speculation, no matter how hard the MPs push him.
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