Back to all announcements

Government grilling will decide if King is cooked

Mervyn King, governor of the Bank of England, will fight to defend his job following the Northern Rock crisis.

The central bank's boss must appear in front of a Treasury Select Committee after the surprise injection of $14 billion into the UK economy, in what was described as a U-turn.

But a spokesperson for Mr King argued that that the move was not a U-turn but one of the options that the governor had raised in his letter to the select committee last week.

Many believe that Mr King's letter was arguing that a cash injection would encourage excessive risk taking but the spokesman said that the injection was not inconsistent and that Mr King believed all central banks had to be ready to act.

The committee is also expected to grill Mr King over the handling of the Northern Rock crisis, which has been attacked because it did not alleviate panic amongst customers.

Speaking to City AM, a member of the committee to grill Mr King, Colin Breed, said: "Having resisted for ten days and then having to ultimately do it, it is a U-turn. But it is a welcome U-turn."