King openly gloomy about U.K.'s road to recovery
Mervyn King, Governor of the Bank of England, leaves a meeting with Prime Minister David Cameron.
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Bob Moon: This morning, there's word industrial production in the 16 countries that use the euro fell unexpectedly in June. That's adding to fears that economic growth in Europe may not be as strong as anticipated. Plus, the U.K. is fretting about its own deteriorating prospects. From London, Marketplace's Stephen Beard has more:
Stephen Beard: Britain's tabloids have called him "Swervin' Mervyn". The head of Britain's central Bank, Mervyn King. He's well known for his sometimes evasive performances in public.
But this time at a special news conference, there was no mistaking Mervyn King's message. It was gloomy. He warned of lower growth than expected. This is partly to due to a lack of bank lending, the same problem as in the U.S. King said the U.K. faces a long, hard road back to full recovery:
Mervyn King: Whereas crises occur suddenly, they fade only gradually. It will take many years before bank balance sheets and fiscal positions return to anything like normal.
In spite of that grim forecast, some economists feel that Mervyn King is actually over-optimistic. They fear the new government's plans to slash public spending and cut Britain's record budget deficit could tip the U.K. back into recession.
In London, this is Stephen Beard for Marketplace.