The business - Patrick Hosking sizes up "Steel Nerves Merv"
"Steady Eddie", outgoing governor of the Bank of England, has barely put a foot wrong. Can his succe
Having put the boot into Eddie George two weeks ago, I must join the hagiographers praising the outgoing Bank of England governor. The overall verdict has to be positive.
There have been hiccups in his career - the collapse of BCCI and the ill-fated attempt to prop up the pound in the dark days before Black Wednesday to name two - but "Steady Eddie" is assured a prominent niche in the central bankers' hall of fame. Since Gordon Brown handed over interest rate policy to the Bank in 1997, George has barely put a foot wrong. Contrary to all expectations, the Bank's monetary policy committee (MPC) has consistently hit or come close to the 2.5 per cent inflation target.
He has established confidence in the Bank - from ordinary mortgage borrowers, from City traders and internationally, where Britain's reputation for prudent economic policy has improved immeasurably. He has been opaque enough to keep City traders guessing, but not so Greenspan-esque that it is impossible to gauge his opinion on anything. And he has been a grown-up. It must have been tempting to throw his toys out of the pram when Brown took responsibility for banking supervision from Threadneedle Street and gave it to the new Financial Services Authority. But George - after considering resignation and no doubt puffing on a few more Rothmans than usual that day - stayed put, thank goodness.
A key lever of economic power has been successfully removed from the grasp of short-termist, vote-hungry ministers. George, as much as Brown, should take the credit for that.
In one sense, however, it is too early to judge the George years. The MPC sets interest rates to regulate the economy two years hence, and the impact of its decisions ripples out for years after that. Over the past five years, the Bank has consistently underestimated the strength of the housing market. It repeatedly claimed things were about to cool, only to see property prices rocket ever higher. Maybe there will be a soft landing, in which prices simply stagnate for a few years while incomes catch up.
But if the bubble bursts more painfully - with sharp house price falls across the country, negative equity and all the shocks that ensue from that - then George and his colleagues would have to shoulder some of the blame.
I say George barely put a foot wrong. His one gaffe (although he insists he was quoted out of context) was to tell a Tyneside reporter a few years ago that unemployment in the north-east was "a price worth paying" for low inflation nationwide. He was right, too, though I wouldn't necessarily express that opinion in Gateshead. His successor, Mervyn King, a brainy and intellectually uncompromising economist, will doubtless bear the ensuing furore in mind. His big idea is to visit all 12 regions of the UK each year to find out what is going on in every corner of his economic kingdom and apply policy accordingly. He will doubtless be accused of being an ivory-tower southerner (he actually comes from Wolverhampton) with no understanding of the problems faced in the regions. The inflexibility of a "one-size-fits-all" interest rate policy can apply to a single country as well as across Europe. Good luck to him.
The new appointment led me to grub through Land Registry records to answer the big question: does Mervyn have a mortgage? It doesn't seem an unreasonable question. The unelected official who sets our interest rates should surely publicly disclose such a potential conflict of interest as a matter of course. But Threadneedle Street refused to say.
Hence the sleuth-work. The answer is yes, King has a loan from the Halifax on his Notting Hill flat, but owns a second home, a bolthole in bosky Kent, outright and unencumbered.
It would be ridiculous to suggest that the scrupulous King would be swayed one jot by his personal circumstances. But somehow it's reassuring to know that he will share the pain of millions of other homeowners if and when he has to raise rates.
After "Steady Eddie", what do we nickname the new governor?
"Merv the Perv"? There is not a whiff of sexual misadventure. Although not married, King, 55, has been in a happy, long-term relationship with his German girlfriend since Cambridge days.
"Merv the Swerve"? Totally inappropriate. King is the least likely person to bend with the political winds. He made an MP on the Treasury select committee who suggested otherwise look particularly stupid last year.
Ian King, City editor of the Sun, suggests "Steel Nerves Merv", which I like. As the Bank sticks with the highest interest rates in the west while economic growth slows to an 11-year low, it may soon be fitting.
Patrick Hosking is deputy City editor of the London Evening Standard