BoE governor urged to resign after admitting Cameron ‘concerns’
LONDON: The Governor of the Bank of England has been urged to resign after it emerged he expressed "great concerns" about David Cameron and George Osborne to a US diplomat.
David Blanchflower, a former member of the Bank of England's monetary policy committee, claimed that Mervyn King's "thirst for power and influence" had "clouded his judgement one too many times".
The prominent economist chastised Mr King for his "unforgivable sin of compromising the independence of the Bank of England" by becoming involved in discussion on party politics.
His comments come as leaked documents revealed that, in the run up to the May General Election, Mr King told the US ambassador to London, Louis Susman, that he was worried about the Conservative leadership's "lack of experience".
Mr King's fears, expressed in a meeting on Feb 16, were sent in a cable to the US Secretary of State, Hillary Clinton, and disclosed on Tuesday night by the WikiLeaks website.
In an article
on guardian.co.uk, Mr Blanchflower said: "Mervyn King is one smart guy and that has always been abundantly clear...unfortunately, it is his thirst for power and influence that has clouded his judgment one too many times.
"He has now committed the unforgivable sin of compromising the independence of the Bank of England. He is expected to be politically neutral but he has shown himself to be politically biased and as a result is now in an untenable position. King must go."
The disclosures could test the relationship between Mr King and the Prime Minister and his Chancellor. Labour is sure to exploit the embarrassment at Prime Minister's Questions later today.
The Governor complained that the future Prime Minister and Chancellor relied too heavily on a narrow circle of advisers. They also "had a tendency to think about issues only in terms of politics, and how they might affect Tory electorability [sic]". Mr King also said he had held private meetings with the Tory leader and Mr Osborne before the election to urge them to draw up a detailed plan to reduce the deficit. In a note to Mrs Clinton, Mr Susman said: "King expressed great concern about Conservative leaders' lack of experience. He opined that party leader David Cameron and shadow chancellor George Osborne have not fully grasped the pressures they will face from different groups when attempting to cut spending." Mr King had held private meetings with the two Tory politicians to urge them to draw up a detailed plan to reduce the deficit. Other cables disclosed that Mr King believes the economic crisis among eurozone countries will accelerate political union. The Governor told US diplomats: "Leaders in Germany and France have recognised that allowing monetary union to happen without corresponding political cohesion was a mistake and one that needed to be rectified." -PB News
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