Paul Krugman: Central Bankers, Politicized

Tuesday 1 March 2011

Mervyn King, governor of the Bank of England, has crossed the line by acting as cheerleader for the Conservative Party’s policies of making deep cuts in public spending — cuts that have affected everything from university tuition fees to tax breaks for families.

“The last thing you ever want is for the Bank of England to be drawn into the political arena,” Ed Balls, the shadow chancellor and a spokesman for the opposition Labour Party, told the Financial Times in an interview on Feb. 17. Mr. Balls has criticized the governor for publicly backing the harsh austerity policies, which Mr. Balls says could spark a double-dip recession and more unemployment in Britain.