Contrasting speeches
- 19 Jun 08, 10:38 AM
I'm brooding on the contrast between the two speeches at the Mansion House last night. The chancellor's message, indeed his peroration, was to be confident, although, of course, he insisted that he'd never be complacent. He ridiculed comparisons between today's inflation rate and that of the 1970s - not only is it lower, he said, but inflation now comes from abroad rather than being home-grown.
Mervyn King, the governor of the Bank of England, on the other hand, had a very austere message. Average take-home pay would stagnate this year, he said. He and the bank would do whatever was necessary when it came to interest rates. In other words, if you put your pay up in order to counter inflation, the governor was warning he'd put up interest rates to curb it. Either way you pay in the end.
So why the softly softly approach from Alistair Darling? Was it an agreed soft cop hard cop routine? Is the chancellor concerned about talking us into recession? Has he made the political calculation that it is better to invite the unions into a confrontation with the bank rather than with a Labour minister? Whichever it is, it makes a stark contrast with chancellors of the past who would have told us all to tighten our belts and prepare for difficult times.
