TIMES ONLINE: The Governor of the Bank of England was at the centre of an electoral storm last night after saying that the austerity measures needed to tackle Britain’s budget deficit would be so unpopular that whoever wins next week would not get back into government for a generation.
Mervyn King’s opinion, revealed hours before the prime ministerial debate on the economy, came as a respected think-tank predicted that taxes would have to rise by the equivalent of a 6p-in-the-pound increase in income tax over the next ten years.
The Governor’s prediction was made to the American economist David Hale, who passed on the remarks in an Australian television interview. Mr Hale, who has known Mr King for many years, was commenting on debt levels in major economies when he turned to the British election. “I saw the Governor of the Bank of England last week when I was in London, and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be,” he said.
The Times has also learnt that Mr King gave a further indication of the concerns in Threadneedle Street when he recently told a senior American official that the markets would take a very aggressive view if no credible plan was contained in the Queen’s Speech on May 25. >>> Patrick Hosking, Peter Stiff, Richard Partington | Friday, April 30, 2010