ed balls

Ed Balls, shadow chancellor, has criticised Mervyn King, Bank of England governor, saying he should step out of the political arena and stop tying his credibility to the coalition’s “extreme” deficit-reduction plans. In an interview with the Financial Times, Mr Balls drew comparisons between Mr King’s stance and the backing lent by the Bank of England to the Treasury’s fiscal hawks during the Great Depression.

“The last thing you ever want is for the Bank of England to be drawn into the political arena,” said Mr Balls, one of the architects of Labour’s plan in the 1990s to give the Bank its independence. “Central bank governors have to be very careful about tying themselves too closely to fiscal strategies, especially when they are extreme and are making their job on monetary policy more complicated.” Read more