Governor of the Bank of England Mervyn King caused much excitement on Tuesday when he attacked the “excesses” of the City of London and its culture of bonuses tied to short-term targets.
But in the coverage that followed his statements to the Treasury Select Committee, little has been made of his disclosure that he has been more impressed by the trading ability and attitude of Britain’s myriad of privately-owned companies than the large financial institutions based in the City.
He implied that his decisions on what level to set interest rates are influenced more by the needs of these companies – how it will affect their ability to employ people and trade – than to help the financial services sector, upon which Britain has become increasingly reliant.
To quote Mr King: “If you were to ask me what companies have impressed me most during my five years as Governor it would not be the large institutions in the City it would be the many smaller, medium-sized, often privately owned companies in the rest of the United Kingdom economy, who are paid far less than people in the City, who may be operating with two or three housand employees exporting to a dozen countries and they have a tiny, tiny number of highly qualified people working with hem. The rest are ordinary people drawn from the community who work, who are highly motivated.
“These companies have excellent products, they do the most surprising things like exporting to China ordinary manufactured roducts. My first natural question to them is how can you compete with the Chinese? The response is we export to China. There re many companies like this. The big thing is not to generalise.
“I think it is absolutely crucial that we don’t lose sight of the fact that monetary policy is there to ensure steady, sustainable growth for businesses up and down the country who provide employment to people who live there.”
It is not often that you get this kind of insight into the thinking of the Governor of the Bank of England more
Source: Telegraph
Filed under: Business News, Economy, Small Busineses, UK Business
