This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.

BoE governor fears “worst ever” financial crisis

  • Print
  • Comments (1)

Bank of England governor Mervyn King has sounded alarm bells by claiming this could be the worst the UK has ever seen.

King, who was speaking to Sky News, said the financial crisis is the most serious since the 1930’s and possibly ever.

He said: “We’re having to deal with very unusual circumstances and to act calmly and do the right thing. The right thing at present is to create some more money to inject into the economy.”

Kings comment come after the Bank of England introduced a further tranche of £75bn into its quantitative easing programme, bringing the total the bank has pumped into the economy to £275bn.

King said that changes in the past three months meant a policy response was needed and that the amount of money in the economy was not growing quickly enough. He also refused to rule out a further bout of QE.

He said: “The deterioration in the outlook has made it more likely that inflation will undershoot the 2 per cent target in the medium term.

In an interview with ITV, King also said that inflation is likely to reach 5 per cent next month.

He said: “The number for inflation that we’ll see published in two weeks’ time is likely to be over 5 per cent. But that, we think, is the peak.”

“We are past the worst. And from now on, we should be in a position where slowly but gradually living standards, real take-home pay, will be able to pick up. That’s the world we want to get back to,” King said.

  • Print
  • Comments (1)

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

Money Marketing Awards 2015
Put your firm forward as the leading practitioner in your field. Adviser and Advertising categories are open to entries - Enter Now.

Readers' comments (1)

  • Of course, pumping all this electronically manufactured money into the economy by buying "assets" from the banks will work only if the banks then make it available to SME's on terms that they can actually afford, instead of hoarding it to shore up their own balance sheets. The problem is that, so far, the banks have said Yes we will, but then haven't, hence the government, which has so far been unable to come up with any mechanism to make them do so, is having to do so itself by using tax payers' money to buy corporate bonds. It's all very creaky, isn't it?

    Unsuitable or offensive? Report this comment

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick


Do you see the value in adviser trade bodies?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments