On a crisp Thursday in January the
Epsom College Economics and Enterprise Society were incredibly
privileged to hear the former governor of the Bank of England, Sir
Mervyn King speak at Eton College regarding the trials and
tribulations of a post credit-crunch British economy.
A bustling lecture hall listened
attentively as Mr King picked apart the causes of the 2008 crisis,
its effects on today's economic activity, and what the future holds
for Great Britain. The former governor spoke of how the crisis was
not merely the fault of one party or another, but a fault of the
whole economic system we rely on. Reckless and irresponsible spending
and speculation leading to worsening budget deficits, coupled with a
crisis of confidence has seen the effects of the credit crunch
continue even today, stagnation, and macroeconomic imbalance. With
regards to crisis response, Mr King demonstrated that the UK was
experiencing a paradox of policy, where short term actions differ
from long term goals, the government wishes for increased wealth in
the long run, but this is not possible when government spending is
cut in a contractionary fiscal fashion. When queried about the future
of the British economy, Sir Mervyn King concluded that “the future
is uncertain”, and thus he is joined by many, who believe we are
still not out of the woods yet.
