UK finance minister Darling has told parliament that spending was needed to fight unemployment and that Mr King at the Bank of England agrees everything possible should be done to support growth.
Recently King has been stating openly that the massive government borrowing deficit meant it would have to be cautious about anymore fiscal stimulus to boost the ailing UK economy.
This apparent differing of opinion between Bank and Government is like manner from heaven for the oppostion. Today Darling was repeatedly asked on whether he agreed with King that more fiscal stimulus was unaffordable and his defence was to point out that King had said targeted measures may be needed to help get people back into work
The present Government has shown its not scared to spend its way out of recession and more spending is coming down the pike whether the Old Lady likes it or not. One can only hope that the banks’ conservative tone will lead to some caution on the governments part.
The budgeoning government deficit, and how its going to be funded, is one of the big negatives which hangs over sterlings’ head like the sword of damacles.
