The Economics Show Martin Wolf talks to Mervyn King: why central banks got inflation wrong
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Apr 14, 2025 Mervyn King, former Governor of the Bank of England and author, joins Martin Wolf, chief economics commentator at the Financial Times. They dive into why central banks mismanaged inflation post-pandemic and the challenges ahead. King discusses the importance of maintaining independence amid political pressures, especially as the landscape shifts with cryptocurrencies. They also reflect on the economic fallout of Brexit and how it has reshaped fiscal strategies in the UK. This engaging conversation is both insightful and eye-opening!
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Post-Retirement Activities
- Mervyn King discusses his post-retirement activities, including chairing an orchestra and leading the MCC.
- He helped manage the sale of a minority stake in the MCC to US tech titans to build a global brand.
Post-Pandemic Inflation & QE
- King criticizes central banks for excessive quantitative easing (QE) and neglecting money's role in inflation.
- He believes QE fueled post-pandemic inflation by boosting demand while supply was suppressed.
Monetarist View
- Martin Wolf and King discuss why the economics profession dismissed the monetarist explanation for the inflation spike.
- Wolf suggests accommodating supply shocks by letting inflation rise was the easiest path.