The former head of the Bank of England says âat present there are so many areas of uncertaintyâ
Fmr head of the Bank of England says âat present there are so many areas of uncertaintyâ
Lord King, who was Governor of the Bank of England from 2003 â 2013, has told the ±«Óătv that the current wars in Ukraine and Gaza have made formulating economic policy âvery difficultâ.
Speaking to ±«Óătv HARDtalk, Lord King said the situation was more complicated than during the 2008 crash when he was in charge at the Bank of England.
âThe financial crisis was a crisis of the western banking system â so we knew where the problems were,â he said. âOnce we had decided to recapitalise the banking system and persuaded governments to do it, then the banking crisis ended.â
âThis is much more uncertain and dangerous,â he said. âThe only time I can think, in my lifetime, where there has been so much fear was the Cuban Missile Crisis.â
Lord King said current events made predicting the direction of the economy very difficult. âWe canât forecast the future. So when people say âGDP forecast for next year is 2.2%â, itâs a meaningless number. There is too much uncertainty.â
This, he said, meant governments around the world were struggling in their responses to pressing economic problems. âThe role of economics is to help you think through the problem and identify the big risks we face so that governments can put in place mitigating solutions to them. We canât change the uncertainty that is there, but we can try and cope with it better.â
âThe trouble at present is that there are so many areas of uncertainty, itâs very difficult to think of a simple strategy that will enable governments to cope,â he said.
