Bank of England’s Mervyn King Tells Unions They Have a Right to be Angry with Banks

Mervyn King told the TUC: "The costs of this crisis will be with us for a generation."

Mervyn King told the TUC: “The costs of this crisis will be with us for a generation.”

Mervyn King announced that the Bank of England is prepared to add money to the economy if recovery begins to fail. The Bank of England’s Monetary Policy Committee (MPC) already injected 200 billion into the economy through its quantitative easing programme. The fact that King made this remark hints that interest rates will remain unchanged.

King’s comments were made at the Trades Union Congress (TUC) in Manchester. Fellow MPC member David Miles reported that inflation is high; referring to the report that inflation had remained unchanged at 3.1 per cent in August.

Miles said: “I am particularly concerned about inflationary pressures, since it is our job to keep the rate close to the 2 per cent target and it is uncomfortably above that at present.”

Many union leaders voiced their outrage at banks during the meeting before King spoke. They voiced that they felt anger at the bank’s responsibility of the current economic problems and the high monetary payments being made to bank leaders. King told the 700 union delegates that he felt they had a right to be angry. He said people were comfortable with business men being well rewarded as long as the money was for work well contributed to successful efforts.

He added: “But when large bonuses are paid to people in organisations that only two years earlier were bailed out by the taxpayer it becomes somewhat harder to understand.”

King said that the recovery for the nation was going to take a long while. He said: “The costs of this crisis will be with us for a generation. And we owe it to the next generation to seize this opportunity to put in place reforms that will make another crisis much less likely and much less damaging.

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