PM: ‘Mervyn King Backs Me On Economy’ Posted on March 26th
5:11pm UK, Wednesday March 25, 2009
Gordon Brown has insisted the Bank of England Governor backs him over measures to support the economy.
Brown will travel to South America next
Mervyn King warned this week that the state of public finances meant the Government could not afford a fresh “fiscal stimulus” package in next month’s Budget.
But the Prime Minister told an audience of economists in New York: “What the issue is actually now is whether we are prepared, given what happens over the next few months, to do what is necessary to resume growth in the economy.
“I think, if you put that question to Mervyn King, he will say - as he said when he signed the G20 communique - that we have got to be ready to take action that is ready to restore growth.”
During the interview with Wall Street Journal editor Robert Thompson, Mr Brown also said protectionism was the greatest threat to global economic recovery.
Watch Mr Brown’s interview with the Wall Street Journal
He told economists: “I do believe the greatest danger that we face as trade starts to fall is countries will resort to protectionist measures that make a recovery even more difficult,” he said.
The Prime Minister also said that deflation was a greater threat than inflation in the near future.
“In the short-term I think there is concern about the problems that could come from deflation, and that is why people have taken the actions that are necessary,” he said.
Later, at a panel discussion at New York University, the Prime Minister said he expected countries attending the G20 to agree a “very substantial” package of measures to boost world trade.
Mr Brown is on the second leg of his tour to lay the groundwork for the G20 summit.
Yesterday, he used a speech to MEPs in Strasbourg to push the European Union to take the lead in rehabilitating the world economy and forging a new “moral” capitalism.
He called for an end to offshore tax havens, tougher financial regulation, and international limits on remuneration.