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Osborne warns Bank of England against hurting recovery

Chancellor George Osborne

Chancellor George Osborne has warned the Bank of England not to undermine an economic recovery by blindly focusing on banking stability.

The Financial Times reports the chancellor gave the warning as part of a letter to outgoing Bank governor Sir Mervyn King, who will be replaced by Bank of Canada governor Mark Carney in July.

Osborne told the Bank’s Financial Policy Committee to give “due weight to the impact of its actions on the near-term economic recovery”.

He acknowledged the “short-term trade-offs” the FPC needed to bear in mind between ensuring banks were sufficiently capitalised and at the same time boosting lending.

Osborne said the FPC should pay attention to its secondary objective of sustaining growth “at this stage in the cycle.”

He also encouraged FPC members to ensure their speeches and opinion statements were co-ordinated, saying market confidence would be boosted by “consistent messages about the planned regulatory response to financial stability risks.”



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Perhaps Mr Osborne should take his own advice. Hearing him talk up a 0.3% growth figure was frankly embarrassing. 1mil young people unemployed, 2.56mil in total unemployed and growing, then telling the banks they should keep to a co-ordinated message to ensure the positive spin is spun and the markets will buy it as an eternal truth. Tell those who are now paying a bedroom tax, having their genuine disability allowances cut, all those currently working for banks under the threat of redundancy.
    Mr Osborne says; we can’t have the banks hurting the recovery. What recovery you may well ask?

  2. 11% employer’s National Insurance + 4% NEST employer’s contribution = a 15% surcharge on employing 1 new youngster.

    Mr Osborne take note that is one reason why we are not recovering and why unemployment is not reducing. Nothing to do with the Bank of England.

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