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Governor NewsWorld events make the Bank of England impotentSombre – there is no other word for it. One good measure of the seriousness of the economic situation is that the Bank of England governor has stopped making jokes. Gone are the quips about disco dancing or the true meaning of Christmas not being clear until Easter (as far as retail-sales statistics are concerned).Read Full Article Mervyn King: Bank of England has no room for manoeuvreThe Governor of the Bank of England dashed hopes yesterday that it would act to shore up the rapidly weakening economy as he made clear that surging inflation would scupper chances for more than one further interest rate cut this year.Read Full Article Bank chief Mervyn King raises spectre of British recessionBritain faces two years of economic pain and could sink into recession, the Governor of the Bank of England has warned.Read Full Article Mervyn King to grimace and bear bad newsWhen the Bank of England’s Governor unveils its latest prognosis for the economy this week, he is likely to adopt his sternest demeanour. The message from Mervyn King may not be quite as bleak as Churchill’s famous admonition that he had “nothing to offer but blood, toil, tears and sweat”, but it may not be far off. The Bank’s hardline decision last week to keep interest rates on hold despite the latest spate of dreadful news over worsening economic conditions gave a foretaste of the granite-hard façade that it is set to present to the country in its latest quarterly Inflation Report on Wednesday. The “no change” verdict on interest rates from Threadneedle Street can only have appeared to much of the country at large like an exercise in monetary sado-masochism. Yet the harsh reality that confronts the Bank’s Monetary Policy Committee (MPC) is that it remains trapped between an economic rock and a hard place. Far from easing as the economic outlook has grown darker, the conflicting pressures confronting the MPC – from faltering growth and activity on the one hand and simmering inflationary pressures on the other – have intensified. The deluge of ever more dismal economic indicators now leaves little doubt that the economy is facing its most testing two-year stretch since the early Nineties. Yet as the going gets much tougher, the persistence of the inflation threat condemns the Bank to talk, and act, tough, too. The MPC’s mission to ensure that inflation hits its 2 per cent target over the medium term leaves it scant room for manoeuvre. It is forced to act only cautiously, even as the demands for more aggressive and urgent action escalate. The Bank’s dilemma seems set only to be become more acute through the summer, as the Inflation Report is likely to spell out. If anything, the MPC’s latest assessment is likely to understate the full scale of dangers to growth prospects that have emerged. At the heart of the heightened risks is the increasingly dire straits of the housing market, which appears to be locked into a vicious downward spiral triggered by the mortgage lending drought. The severe squeeze on the availability of home loans is combining with falling house prices to cause demand in the property market to dry up, with cautious buyers holding out for the much lower prices they expect in future. As demand and market activity drop, and the supply of unsold houses grows, prices fall farther and faster. In turn, that farther deters would-be buyers and makes lenders become even more cautious, fuelling an ever steeper downward slide. The scale of these trends is underlined by the Council of Mortgage Lenders’ data, highlighted by Michael Saunders, of Citigroup, which shows the drastic tightening of lending conditions since the start of the year. The number of new home loans agreed plunged by more than 30 per cent in the first quarter, compared with the same period a year earlier. In March, approvals of new mortgages fell to the lowest since 1992. Although the Bank of England’s £50 billion lifeline, designed to ease the funding pressures on lenders, may limit the squeeze, Mr King has been bluntly candid that it is far from intended as a cureall for the mortgage market. The clear peril for the economy is that the toll on sentiment and household wealth from an increasingly severe housing correction now sees the credit crunch mutate into a brutal consumer crunch as households pull back their spending. The Bank tends to play down the repercussions of falling house prices for consumer demand. Yet signs are already accumulating that the consumer may embark on a full-scale retreat from the high street. Consumer confidence has slumped to 15-year lows, while polls show that concern over the state of the economy is at its highest levels since 1993. As other signs of economic weakness pile up, it is becoming painfully clear that Britain, far from being better placed than its rivals to weather global economic squalls, as the Chancellor and Prime Minister claim, is markedly worse off. As Mr Saunders argues, the UK is left badly exposed by the highest household debt burden in the Group of Seven leading industrial economies, alongside severely inflated house prices and low household savings. The price of a protracted period of living beyond our means may now have to be paid. Long years of high spending, as well as heavy borrowing excess. are making the fallout from the credit crunch more painful and the boost from the Bank’s limited easing of interest rates less potent. Yet, worse still, the same past excesses, in the form of a swollen current account deficit, are adding to the acute pressure on a sharply weakening pound, already hit by Britain’s worsening growth outlook. Sterling’s steep slide – by about 12 per cent in the past year - is aggravating the Bank’s inflation headache by raising the nation’s import bills and further curbing its scope to cut base rates to underpin faltering growth. With the pound set to tumble still farther, oil prices having surged to record levels of above $120 a barrel and the cost of food in global markets soaring, the City expects that the Bank will raise its forecasts for inflation this week. It is likely to give warning that headline consumer price inflation will rise above 3 per cent over the summer, forcing Mr King to pen what will be only his second explanatory letter to the Chancellor. Against this background, the Governor can be expected to make it brutally plain on Wednesday that further easing of interest rates will be only limited and gradual. Ultimately, the extent of the slowdown now taking hold in the economy will quell the inflationary threat that the Bank is, for now, compelled to prioritise over risks the growth.$Read Full Article King denies £50bn lifeline will renew mortgagesMervyn King, the Governor of the Bank of England, today undercut claims by Alistair Darling that the Bank’s £50 billion-plus lifeline to Britain’s lenders will end the mortgage logjam endangering the housing market.Read Full Article External News for: governorRepublican governor as gay rights defender: a sign of the times? - Christian Science MonitorChristian Science MonitorRepublican governor as gay rights defender: a sign of the times?Christian Science MonitorRepublican governor Bob McDonnell of Virginia, reversing his previous position, this week extended nondiscrimination protections to gay state workers. ...Governor overrides AG's decision as gay activists swarm the CapitolExaminer.comCasteen: Governor McDonnell Clarifies Nondiscrimination PolicyUniversity of VirginiaVirginia's republican governor steps in to protect the gaysGay Socialites (blog)Lez Get Real -USA Today -Towleroad (blog)all 714 news articles »Republican governor as gay rights defender: a sign of the times? - Christian Science MonitorChristian Science MonitorRepublican governor as gay rights defender: a sign of the times?Christian Science MonitorRepublican governor Bob McDonnell of Virginia, reversing his previous position, this week extended nondiscrimination protections to gay state workers. ...Governor overrides AG's decision as gay activists swarm the CapitolExaminer.comCasteen: Governor McDonnell Clarifies Nondiscrimination PolicyUniversity of VirginiaVirginia's republican governor steps in to protect the gaysGay Socialites (blog)Lez Get Real -USA Today -Towleroad (blog)all 714 news articles »Pawlenty Objects to Education Standards - KAALtv.comChristian Science MonitorPawlenty Objects to Education StandardsKAALtv.com(ABC 6 NEWS) – Governor Pawlenty is objecting to an education proposal coming from a group he used to lead. 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