Britain's central banker harbored grave concerns over what he perceived as the economic inexperience of Prime Minister David Cameron and his Treasury chief George Osborne, according to a leaked U.S. diplomatic cable.
Britain’s central banker harbored grave concerns over what he perceived as the economic inexperience of Prime Minister David Cameron and his Treasury chief George Osborne, according to a leaked U.S. diplomatic cable.
Bank of England Governor Mervyn King voiced doubts about Cameron and Osborne in the months before they assumed power in Britain’s May general election, according to a secret U.S. embassy cable published Wednesday by the WikiLeaks website.
The exchange – which was front-page news in Britain – raises questions about the qualifications of the two men now engaged in Britain’s biggest deficit reduction program since World War II – and about King’s impartiality.
In the Feb. 16 conversation with U.S. ambassador Louis Susman, King “expressed great concern about Conservative leaders’ lack of experience and opined that party leader David Cameron and … George Osborne have not fully grasped the pressures they will face from different groups when attempting to cut spending,” the cable read.
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Under the heading: “Conservatives – Not Prepared,” the U.S. diplomatic cable goes on to describe King’s thoughts on the Conservative Party, which he said suffered from a “lack of depth.”
“Cameron and Osborne have only a few advisers, and seemed resistant to reaching out beyond their small inner circle,” the cable quoted King as saying.
The cable is embarrassing for King, whose public remarks are carefully scripted and whose role in setting the country’s interest rate is supposed to be apolitical.
The Bank of England was made independent of government control in 1997. A long-serving member of the bank, King was appointed to a second five-year term as governor by Labour Prime Minister Gordon Brown in 2008. Brown and the Labour party were ousted from power in the May vote.
Economist David Blanchflower, a prominent former member of the bank’s Monetary Policy Committee, said that King had “committed the unforgivable sin of compromising the independence of the Bank of England.”
“(King) is expected to be politically neutral but he has shown himself to be politically biased and as a result is now in an untenable position. King must go,” Blanchflower – a frequent critic of King’s – wrote in an editorial published Wednesday on The Guardian newspaper website.
The Bank of England declined to comment on the release, saying in a terse statement that King “has a very effective working relationship with both the chancellor and the prime minister.”
Britain and the United States are bracing for more leaked cables expected to lay bare more exchanges between U.S. diplomats and foreign politicians, although both sides have said the so-called “special relationship” between the two allies would remain unscathed.
British Deputy Prime Minister Nick Clegg, who met with U.S. Secretary of State Hillary Rodham Clinton in Astana, Kazakhstan on Wednesday, released a statement saying “that recent Wikileaks disclosures would not affect our uniquely strong relationship.”
Clinton insisted Wednesday the leak of sensitive U.S. diplomatic cables will have no adverse effect on America’s international relations.
Blanchflower’s editorial: http://bit.ly/eDe8IQ