King: no further fiscal stimulus

Link to the article: Channel 4

Last Modified: 24 Mar 2009
By: Faisal Islam

The governor of the Bank of England says the government should not try to boost the economy with tax cuts or extra spending.

Britain's finances are so dire that we cannot afford another package to boost the economy in next month's budget, Mervyn King told MPs.

It might get a frosty response from Downing Street, with the prime minister talking up the idea of another fiscal boost to end the recession.

Today, however, against expectations, the consumer price index, a key rate of inflation, rose to 3.2 per cent - above the government target.

At the same time another key inflation rate, the retail prices index, used by many companies to settle wage deals, dropped back to zero.



Inflation discussion

Joining Jon Snow are Richard Jeffrey, chief investment officer at Cazenove Capital Management and Roger Bootle, chief economist at Capital Economics and author of The Death of Inflation.