UK Public Sector Borrowing Too High

Amidst recent news on the state of Britain’s economy, UK Banking chief Mervin King has called for the British Government so “show restraint” in public sector borrowing.

This was during an appearance before the treasury committee in which he and other banking officials provided evidence on the Bank of England and its latest report on inflation and the banking crisis.

During this time, Mervin King, Governor of the Bank of England made numerous comments criticizing the UK governments approach to handling the economic crisis.  At the same time of making these comments, he re-iterated the request for the Bank of England to have yet more powers to protect against any future economic crisis and to ensure that “powers and responsibilities were appropriate”.

The Bank of England has a statutory requirement to advise and monitor failing industry, and he calls for additional powers to help them regulate and provide oversight for larger financial institutions.

Previously during the week, the Conservative party announced that if they were elected they would give the Bank of England the power to regulate many of Britain’s larger banking institutions.

Mervin King’s recent comments come as a scathing attack against the treasury and Alistair Darling.  Mr. King was critical of the governments planning and policies for the future disavowing responsibility of the financial crisis based on the Bank of England’s limited powers.

There are currently real concerns about the state and also the future of the British economy. Analysts agreed that more unification and forward planning are required in order to reach any sort of agreement about the future of the economy.  However, with so much turmoil in the air between the government, the Treasury and bank of England, it is still too early to say how long the UK recovery will take, and when banks will feel comfortable to lend money again.

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