Comment: Mervyn King patiently awaits Osborne to change tack

He does, though, seem to believe that the healing process has begun.  It’s just that full recovery will be long and slow.

The Governor of the Bank of England says that there’s not much else we can do except to wait for the current package of stimulants to take effect and to hope that the eurozone problem does not get worse.

It might be interpreted as an admission that the Bank has run out of ideas. After all, King offered no support for a further cut in interest rates from  0.5 per cent to 0.25 per cent or even to zero and refused to demand that the UK government adopts a Plan B for recovery that would see the deficit measures reined in, taxes cut and public spending ramped up. Instead, he is placing all his bets on the Bank’s injection of money into the economy via asset purchases – or quantitative easing (QE) – and initiatives such as the Funding for Lending scheme, which provides the high street banks with cheap money to pass on to businesses.

There were gasps of disbelief last autumn when it was suggested that QE could go as high as £500 billion, but – with the programme now at £375bn and likely to top £425bn before Christmas – those predictions are looking fairly modest.

King appealed to companies to show some Olympic spirit, but they are not lacking in commitment or desire, only in their confidence that demand will pick up and prove sustainable.

The problem for King is that QE has so far failed to make any discernible difference; at least none that anyone has noticed. King – who believes the economy is actually healthier than the official data suggests – argues that, with inflation under control and falling, the squeeze on take-home pay is coming to an end. As such, we should all begin to feel better off.

But “better off” in this context won’t feel much different to feeling “no worse off”. The economy has been bumping along for some time with little expectation of a sharp shift upwards or downwards, unless Europe suddenly takes a turn for the worse or someone finds the silver bullet.

To that extent, the Bank of England has little choice but to warn that the UK economy will be held back until stability returns to the eurozone.

It also means it has nothing much more to give and if there is to be an alternative policy, then it must come from the UK government.

So far, the coalition has dug in its heels over deficit reduction. But the likelihood is that Chancellor George Osborne, shorn of tax revenues and facing zero growth, will be forced for political as much as economic reasons to change direction.

Rangers deal another step in right direction

SUPPORTERS of the new Rangers football club will no doubt welcome news that retail tycoon Mike Ashley is expected to take a stake in the club as part of a deal to set up a joint merchandising venture.

He was mentioned alongside JJB Sports as a potential buyer when Rangers put its shops up for sale in 2006.

A sale was eventually signed with JJB, which also provided an annual payment over ten years. That agreement is thought to be dead as a result of the old Rangers’ falling into liquidation. It was supposed to provide a secure stream of income, though critics thought Rangers had sold part of the family silver and that, along with gate receipts and TV money, it had relinquished control over one of the three main sources of revenue.

But these are different times and this is a different sort of deal. It’s not clear whether Ashley, who owns Newcastle United, will join Rangers’ board, but his involvement will be another step in the normalisation of commercial activity at Ibrox.

American fight for top spot serves no-one

AMERICAN regulators are accused of using the latest banking scandal to reclaim the crown as the world’s trading capital from London.

But they are also battling among themselves to prove who is the toughest. This is playground politics that won’t help anyone.