×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: mervyn king | bank of england governor | quantitative easing | central banks | federal reserve | inflation

Ex-Bank of England Governor Says Central Banks Share Blame for Inflation

Mervyn King
Mervyn King, former governor of the Bank of England (Getty Images)

Friday, 20 May 2022 08:14 AM EDT

Former Bank of England Governor Mervyn King said on Friday that central banks including the BoE are to blame for the current surge in inflation to its highest in 40 years, after doing too much quantitative easing during the pandemic.

King headed Britain's central bank from 2003 to 2013, and oversaw the start of its QE program in March 2009 during the global financial crisis.

But in more recent years he has criticized the scale of central bank asset purchases, which were funded by newly-created money.

"When you get an intellectual mistake in policy, and you allow inflation to rise, if you're then hit by bad luck - which is what happened in the 1970s and is happening now - it becomes a very unpleasant outcome," he said in remarks to Sky News.

British consumer price inflation was at its 2% target as recently as July, but hit a 40-year high of 9.0% in April, and inflation in the United States rose to its highest since 1981 at 8.5% in March.

While central banks point to supply-chain difficulties and a surge in energy prices, worsened by Russia's invasion of Ukraine in February, critics say inflation is also evidence of too much monetary and fiscal stimulus during the COVID-19 pandemic.

A leading contender to head Canada's Conservatives, Pierre Poilievre, has threatened to sack the Bank of Canada's governor if he wins a national election in 2025.

Some lawmakers from British Prime Minister Boris Johnson's government - under growing pressure over the cost of living - have also raised doubts about the BoE's leadership.

King, who is now an independent member of Britain's upper house of parliament, and sits on its economic affairs committee, said there had been "a failure of the economics profession."

Few economists have pointed to central bank money-printing as being a major cause of the current inflation surge.

King also warned BoE interest rates might need to rise well above the 2% level which some economists see as a peak.

"It takes tough action. And it's not a pleasant period through which we're going to have to go," he said.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
Former Bank of England Governor Mervyn King said on Friday that central banks including the BoE are to blame for the current surge in inflation to its highest in 40 years, after doing too much quantitative easing during the pandemic.
mervyn king, bank of england governor, quantitative easing, central banks, federal reserve, inflation
352
2022-14-20
Friday, 20 May 2022 08:14 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved