Regards, Ivan
Posted on 11/27/2002 5:36:35 PM PST by MadIvan
The appointment of Mervyn King as the next governor of the Bank of England will be seen as a further sign that the Treasury is cooling on the prospect of early membership of the European single currency.
Mr King, the Bank's deputy governor, who will succeed Sir Edward George next July, is a noted sceptic on the euro.
Three years ago, Mr King told a Commons select committee "you would probably need 200 or 300 years of data" to be sure it was safe to join the euro.
Although Mr King had been the favourite to succeed Sir Edward, the timing of the appointment caused surprise. It was seen as an attempt to reassure the City at a time when Gordon Brown was admitting he had got his forecasts wrong and was having to borrow much more than planned.
Mr King gets on well with the Chancellor and has played a key role in steering Britain through the turbulence created by the economic slowdown.
He was a founder member of the Monetary Policy Committee set up five years ago to determine interest rates on a monthly basis. His appointment could signal a more "hawkish" tone as Mr King voted for rates to go up in both June and July this year.
Mr Brown told the Commons that Mr King would ensure a "steady grip" remained on monetary policy. Tony Blair said he had "an excellent track record" at the Bank.
Treasury officials said Mr Brown and Mr Blair had agreed on Mr King's appointment in discussions over the past two weeks.
If Mr Blair had wanted to send a positive signal on the single currency, he could have pressed for the appointment of a more euro-friendly candidate, such as Sir Howard Davies of the Financial Services Authority, or Andrew Crockett, general manager of the Bank of International Settlements in Basle.
Mr King said yesterday it would be "difficult, if not impossible, to follow Eddie George, who had led the bank through the crucial years before and after independence, and to whom it owes so much".
Regards, Ivan
,,, not as long as the Sterling is as overvalued as it is and you're having to borrow more than you thought you'd have to.
Thank heavens for modern psychiatry and euroleptics.
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