“I think there are four [solutions for the eurozone] . One is to continue with mass unemployment in the south, in order to depress wages and prices until they’ve become competitive again. The second is to say, ‘Well, we have to get rid of this imbalance in competitiveness, so we need inflation in Germany.’ That seems unattractive, certainly to the Germans. The third is to give up on this question of restoring competitiveness quickly and accept that this is an indefinite transfer union. That requires two things: one is for people in the north to give money to people in the south; the other is for people in the south to accept the conditions imposed on them, which will limit the size of the transfer. The fourth is to change the membership. Now, I don’t know what the right answer is, and it will depend on their political objectives, but economics tells you that you have to have one or some combination of these.”
Sir Mervyn King, Bank of England Governor
complete boe inflation report here
Her Majesty the Queen has been pleased to approve the appointment of Mark Carney as Governor of the Bank of England from 1 July 2013. He will succeed Sir Mervyn King.
Welcoming the appointment the Chancellor of the Exchequer, the Rt Hon George Osborne MP, said:
“Mark Carney is the outstanding candidate to be Governor of the Bank of England and help steer Britain through these difficult economic times. He is quite simply the best, most experienced and most qualified person in the world to do the job.
He has done a brilliant job for the Canadian economy as its central bank Governor, avoiding big bail outs and securing growth. He has been chosen by the rest of the world to be the chair of the international body, the Financial Stability Board, charged with strengthening global financial regulation after the financial crisis.
Along with its central role in monetary policy, this Government has put the Bank of England back in charge of regulating our financial system so that we don’t repeat the mistakes of the last decade. Mark Carney is the perfect candidate to take charge of the Bank as it takes on these vital new responsibilities. He will bring strong leadership and a fresh new perspective.
I look forward to working with Mark as we continue to rebalance our economy, deal with our debts, and equip Britain to succeed in the global race. We needed the best – and in Mark Carney we’ve got it.”