Comment: Mervyn fancies himself the new Che Guevara

Erikka Askeland. Picture: TSPL
Erikka Askeland. Picture: TSPL
Share this article
Have your say

WHATEVER you might think of Argentine revolutionary Che Guevara, his role as a central bank governor probably comes low on the list of his most famous attributes.

But it was this facet of el Che’s CV that Sir Mervyn King highlighted as he embarked on his last speech as head of the Bank of England, in a move that makes you wonder if the Aston Villa fan is feeling de-mob happy.

But King seemed in good spirits – valedictory, even – ahead of handing over his newly expanded governorship to Canadian Mark Carney this summer. He was insistent. “Recovery is in sight,” he said, as he pointed to the 0.3 per cent growth in output in the first quarter, with “growth likely to strengthen” over the course of the year. Albeit his bullishness was mottled with the usual caveats – the grim outlook in the eurozone being the biggest worry.

Tight household spending in the UK is another. Figures coming out at the same time as King’s final inflation report showed Europe in recession, with only Germany, Austria and Belgium avoiding a first-quarter contraction. But France is in the doldrums, showing it is not just the southern 
periphery that is in trouble.

Economist Howard Archer points out that it was consumer spending that drove what little German growth there was, helped by high employment and rising real incomes. Unlike France, where consumers are reining in on the Champagne for breakfast because of job worries and rising prices.

The conditions there sound worryingly similar to the UK. As labour market data showed unemployment rising in the UK – albeit falling in Scotland – the Office for National Statistics said that annual growth in average pay fell to just 0.8 per cent in the three months to March, the slowest increase since comparable records began in 2001.

For King, who has been sharply criticised for repeatedly failing to get it right on inflation, this might yet be a boon. Yesterday, he pointed to the fact that, after you strip out VAT, energy and imports, the magic number, known as the GDP deflator, is a right-on-target 2 per cent. He may not have been revolutionary in his 20-odd years at the bank but he may yet be proved right.

It’s a dram fine idea, wherever it’s from

TENNENT’S lager has been “excellent” for Dublin-based C&C. But while Glasgow’s finest amber is bucking a trend, sales volumes are still down.

But remember, most C&C bosses are refugees from Scottish & Newcastle, including chief executive Stephen Glancey. As such they know how to target foreign markets with drinks they will like. So you wouldn’t fault them for noticing that Innis & Gunn, which makes its oak-aged beer at Wellpark, is a big seller abroad. So welcome, Tennent’s whisky cask beer. Wherever did they get that idea?