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Sir Mervyn King Urged to Widen Scope of Stimulus

Business groups today joined calls for Sir Mervyn King, Governor of the Bank of England, to widen the scope of measures to stimulate the economy.

by Roland Gribben

The calls came after Adam Posen, who retires as a member of the Monetary Policy Committee at the end of the month urged Sir Mervyn to review the operation of the quantitative easing programmes. He was joined by Professor David Blanchflower, former MPC member who said, writing in The Independent, that the Bank had “no clue” about where the economy was heading.

Mr Posen, who moves from the MPC to head the Peterson Institute for International Economics in Washington has been regarded as a dovish monetarist member of the interest rate setting body. But in an interview with the Financial Times he urged Sir Mervyn to abandon the “anguished religious ethics” over quantitative easing and extend the programme beyond buying government bonds and examine measures to unlock financing constraints for mortgages and small businesses.

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