What people like King never admit is that after a period of 10% inflation, even if inflation then falls back to the magic 2%, prices are still 12% minimum higher than they were a 18 months before. Prices will never return to where they were before huge inflation struck, thus the demands for huge wage rises will persist in the medium term.

Isn’t it amazing how all these people suddenly develop 20/20 vision after they leave positions of power where they could actually have done something about the problems and causes they see so clearly

The Central Banks have been printing big time since 2008, which has been devaluing the purchasing power of our currencies

I work in customer service for an energy company, seeing peoples bills almost double is just awful 😖

Government requires inflation to manage debt, central bank is trying to help create it, not fight it. Inflation is stealth tax.

"inflation stayed 2% since than till now" Well I calculated my living inflation from 2005 to 2020 and came across to figures from 4-12% a year. Region of the Netherlands. Items included were salami, rice, eggs, swimming ticket, plane ticket, shoes, electronics, kebab, rent. A secnd way to see the official inflations figures are manipulated/not truth was to compare minimum.wage at burger king as opposed to price of a whooper menu. In 2010 i could buy 2 to 2,5 menu's for 1h of work while in 2020 it came to 1,3. That is an inflation of 100% in 10 years. Annual inflation calculate yourself. With other words we were delibaretely manipulated OR we are dealing with morons with a lot of power and fancy suits. The moment I realised that i sold my money and as much as possible hedged against inflation.

The absolute audacity to say inflation has been kept down since the 90s! Even before this crisis, what about the price of homes? Virtually everything has inflated massively when compared directly with wages stagnating.

How can we get to almost 20 mins in this interview and not talk about the inflated stock market, the inflated housing market, the number of zero contract jobs....the role of crypto currencies, the roll-out of CBDC.......incredible.

I was waiting for Mervyn King to speak on this subject to see whether his opinion confirmed my own suspicions. I have always though King was a man of great integrity and pragmatism, he did not disappoint. We hear much about the cause of inflation from our clueless politicians and economists, the pandemic, Ukraine, supply chain, energy costs and the rests. These elements are contributory of course but do not run to the true cause. The true cause is the continuous dilution of our currency through endless quantitative easing. We are living beyond our means and have been doing so for many years and I fear a rude awakening beckons.

And what about those on a pension or fixed income? They get crushed as the currency loses value, experienced as rising prices.

People in general are seriously spooked by the increasing energy costs, which along with food costs. We gone from " full bore, flat out" to "throw the anchor out " and have stopped spending on anything but essentials. Massive job losses and the mother of all recessions is beyond doubt

He should know what a recession looks like having been in the thick of the last one caused by the banks & investment firms playing roulette with peoples futures and lives.

Very good interview. Refreshing to finally hear someone with authority pointing out the money printing as the main cause for the inflation

…part of the problem folks…part, but not all… Workers haven’t been paid fairly for decades. Politicians haven’t been responsible to the people for decades…

As the wise people warned from the beginning, the over-reaction would be worse than the disease.

Except this time there's way too much debt in the whole system to raise rates to where they should/need to be. Great for Gov's to inflate away their debts but as usual hurts the regular working person

Inflation wasn’t showing up because they kept taking out key inflation indicators so it looked like there was no inflation like housing.. but they knew exactly what they were doing and they know what will be coming.. we are talk about the global financial engineers..

The BoE have failed miserably to control inflation and the value of sterling. Inflation hit 5% after the first chunk of QE in 2009, now 10% after the pandemic QE chunk. Rather than reversing some of the money printing to strengthen the pound, I think the BoE will re-start the printing press again when the recession hits.

It breaks my heart seeing that just a few can see where the surplus that we humans produce is going...to the pockets of - again - just a few. 😔😔😔

Just raise the interest rates to the necessary level, don't prolong the catastrophe. We will have a recessions either way.

An interview where the interviewer allowed the subject to answer fully. Refreshing.

Interest rates have been kept low because of the obsession with housing in the economy and savers have been drawn to more risky investments

The corporate financial economy is fully global - the reach of any central bank is just within its currency’s area. General wealth and ownership have concentrated immensely since 1980 and most nations have sold off (privatised) institutions, assets and outsourced earlier ownerships. In my view, this has left governments and democracies (if applicable) unable (or unwilling) to remedy what unregulated financial growth has created. Growth can no longer mend the lack of resources on a global scale. Even a green shift will be dictated by the corporate sector, not by governments. Financial (non-producing) growth disenfranchises more people than it enables, as QE benefited finance itself, not the majority of non-owners - meaning wage takers of any kind, even well earning families. From now on, housing, energy and food will be out of reach for normal well educated individuals, and that’s different from 1929, 1989 and 2008. It’s also a condition in every country in the global north, also unlike earlier financial downturns.

The inflation has been directly caused the Bank of England for keeping interest rates too low for too long and engaging in in reckless quantatative easing for decades. The BoE has monerised the debt created by The Treasury.Private Banks - Barclays, HSBC, RBS, create 6 - 10 billion each year of electronic money from thin air and use this money to speculate in the money and real estate markets. This drives up the prices of property, energy, food, etc.

Central banking appears to be one of those areas where by the experts that's get promoted to the top job are incredibly poor at what they do. If I were that poor at my job I would be unemployed.

The vast majority of the Printing went to the usual Banksters so they could keep liquidity in there interbank lending mechanism and generate returns in their Global Casino which does little to stimulate the real economy and just pushes up asset prices as they look for assets to swap their Free Money for, pushing up prices as all these Printed Billions are chasing the same big ticket luxury assets. If those Trillions were given to the actual Workers who are the real economy it would stimulate growth, investment and expansion of the real economy instead of the Paper Casino Economy like we have seen since 2008 onwards. Massive global corps that never make a profit stock prices still going to the Moon even when the entire Global economy shut down for the best part of 2 Years. All perfectly normal, nothing to see here, move along, the economy is great LOL. Welcome to Clown World folks.

But what if we collectively decide to stop using their money, why do we put ourselves through non stop debt.

What if the aim of the exercise was to create inflation via QE. With the pandemic as the justification and the reason(s) to erode existing debt accumulated during the years of low rates.

For humble folk it's always just a question of what is the level of unpleasantness for us in this corrupted system we can't break, escape or change for the better

Inflation is a problem because of the Central Bankers of the West. None of them should have the autonomy to slash interest rates to the level that they have. Money should be a store of value, retain its purchasing power and receive an acceptable rate of return, otherwise, it will eventually become just a worthless piece of paper whilst the price of tangible assets skyrockets.

The presenter is thinking 'why didn't I get the Jürgen klopp interview'

Especially since WW2, western economies work efficiently with inflation between 2.5 to 4 percent, together with increasing asset ( mostly real estate & equities ) and commodity values. Deflation is a horrid scenario for central banks, manipulated scarcity of goods and commodities overcomes this catastrophe with instant inflation.

"Complicated models" is a euphemism for deliberate deception.

Inflation has nothing to with wage negotiation; that's a symptom. Money printing - plain and simple is the only cause. Currency creation causes Inflation.

What this country needs is energy security and food security.

Adrian Orr in NZ explicitly said what they were about to engage upon back in 2020 would have significant negative effects, particularly on property prices and the wealth gap. They all knew what they were doing.

"Q. Does QE cause Inflation? A. Yes it does..." -this is a direct quote from the Bank Of Englands website... Central Banks the world over have printed money (QE) and made money too cheap for well over a decade and the reaper has finally arrived...

One thing missing is the money printing was to make their buddies richer money printing only enriches the first user of the new money they knew it would cause inflation because inflation is increasing the currency supply

A very informative interview. "Stuff happens" so forecasts are always likely to be wrong and the King Canute theory of money supply were good points. Also, i like that he showed an empathetic understanding for the impacts of people on low incomes and the ripply effects of that through the wider economy.

This is the man who kept interest rates artificially low until the banking crisis. Well done.

Mrs Thatcher put up interest rates in the late 1980’s /early 1990’s , from mid single figures which had existed for some time to around 12% , this was considered very harsh at the time but it surely did correct inflation. Also it corrected the ever increasing price in the housing market, which was running away from peoples salaries/wages etc , causing people to lend more and force debt situations . Sound familiar today? We currently have house prices running away from peoples “Safe” lending capacity, and 1st time buyers on not able to get on the housing ladder. The Government stance is to print more money won’t work . They say they are producing “Affordable Housing “ , there is no such thing in this climate, because builders will always sell them for the market price, not make heavy price reductions to help 1st time buyers. As long as interest rates are very low , investors will find other ways to make money , whether it be Commodities, housing, Classic Cars or whatever , therefore bolstering prices in those sectors. The housing market leaped 5 times its starting price in Ted Heaths Government 1970- 1974, due to money /lending being made more widely available . It stabilised during the Labour Government after with lending being limited to 3 to 3 and half times gross incomes , protecting banks and lenders at the time. When Mrs Thatcher lifted that lending Umbrella mid 1980’s the market flew up again. When it was clear both Inflation and House Market prices were running away she raised bank rates to correct this after the Stock Market Crash in October 1987. Prices of property fell and stabilised in the early 1990s before rising at first at a slower steadier rate , no longer the Boom /Bust levels of before.

Don't remember this old clown saying that when he was riding shotgun on our way to the 2008 global financial meltdown ? And that other chancer, Mark (quarter point drop every year in office to zero interest rate) - Carney. - It'll work ! it'll work ! - It f**king didn't !

I'm already living through an unpleasant period.

The trouble is he keeps on repeating about Russia's invasion of Ukraine but that's only accelerated what is bound to happen. What really destroyed the economy are government's policies which are anti human. Neil McCoy Ward explains it.

Furlough was popular at the time because the downsides come later. Now we see higher taxes to pay down the debt levels that resulted. But, it has been made worse by the supply chain shocks, commodity price rises and global instability. Some of this inflation will be combatted by recessionary forces. The other exogenous factors may not be, and the problem then will be wage demands at near full employment currently. The threat then is an inflation spiral as wage rises lead to more inflation ad infinitum. The difficulty I see in the current situation particularly is the debt level both public and private in the context of a stagflation environment. The exact transmission environment is difficult to foresee, but pain is a certainty.

"I didn't see the financial crisis coming..!"

Its not energy prices. ITS HOUSING! Single guy employed living in a one bed: £200 food £800 rent £200 housing gas/water/electric/internet/upkeep £150 housing tax £25 Mobile phone £200 vehicle fuel £200 vehicle tax/insurance/maintenence £7 netflix =Lets call that £1800/mth overhead Gross pay £28k, minus tax, = £1900 take home £100 a month spare = £3 per day. 4 pints down the local saturday night. Housing is currently 7x average yearly wage. In the 90's it was 3x. In the 50s it was 1x. Housing prices have been bidded up by a decade of cheap money - look at the history if interest rates and tell me that 14 years of less than 1% interest is normal...

It's already too late to start raising interest rates.

It may not present itself as acutely in the UK, but the monetary policy in US may find itself completely driven by the attempt to "manage" the S&P500, and the Nasdaq. But that didn't happen by accident, the view that stocks cannot fall has been entrenched in the mind of all participants for almost a generation, the greed of wanting more, fear of missing out. But the world is a very much more complex place since the 90s, so whether the conventional Keynesian monetary policy will still do the trick ? It just isn't that simple.

A brilliant person. I'm however amazed that both him and the journalist don't emphasize that energy prices are only likely to get higher in the future. They both treat the situation as temporary. I'm not so sure about that. Evreything points to increasing energy costs in the long term.

Well we haven't had a pricing mechanism since 2007 when the FED began the QEs and took the market out of the interest rate.

Printing money has been on a three-digit increment since 2008, how do one beat that with a miserable 3-5% wage increase now and then?

The best way to beat inflation is for people to group together and stop spending for a period of a few months. Cold showers, turn off your gas supply, cut back to an extent where these companies will start to notice. They will act Just look at the oil and gas companies and their huge profits. Price increases are only going to their pockets!

The energy prices are ALL related to 'green energy' and the WEF. Nothing more, nothing less.

When will savers get better interest rates? 🤔 I had a meagre 0.8% but now it's just 0.45%

The whole idea of a Central Bank is THE big problem. A free market would do a much better job of setting interest rates than a small group of people in a board room at Threadneedle Street. Too bad this question was not asked by the Sky News reporter.

They always seem to exclude the skyrocketing costs of energy, food, and housing especially in calculating inflation. No way were all of those at 2% until very recently. Considering that an average middle or lower class person spends a huge percentage of their income on these items, it's absurd.

Inflation Is a tax by government to pay for their debts

Also like to bring to your attention, Politicians never ask for a pay rise they give themselves it and never miss one...everyone else has to fight for a rise...

2:24. Yes, but the chief reasons were cheaper imports (deflationary) and the impact of IT on the economy. AS for bring inflation back down to 2%, the solution is quite simple. They will continue to fudge the figures and subsidise the economy with debt with one difference, it will be so much easier when everything has been digitalised. It is nothing more than the inevitable dumbing down game.

when he says "all major banks", but really it does not inlcude Chinese central bank. China never printed much money at all. though now it seems to me that the Chinese is about to make the same mistakes.

Mervyn King is wiser now than he was when he retired. The young bucks should pay heed to that old courser.

The git your interviewing is the reason why we are in this mess!

He says that the expansionary fiscal policies in reaction to covid "were enough; Central Banks did not have to create money". He forgets that it was PRECISELY that money that funded those fiscal policies and therefore made them possible.

He was a well behaved puppet for his masters and made them untold fortunes. He was very well rewarded with his peerage to the house of Lords.

In the face of Covid, the central bankers adopted the Politicians' Syllogism: "We must do something. This is something. Therefore, we must do this."

Err wage growth has not in anyway kept up with price inflation during the last 50 years

According to these guys, corporate windfall profits and record - breaking board dividends do not create inflationary pressure... But when minimum wagers strike for an increase of wages so that they meet the cost of living price, inflation must be tamed and austerity must be imposes. If that is the nature of the US, Canadian and British economies, then something fundamental needs to change in the economies of these countries. It's not working anymore!

Was really nice to hear from sir Eddie Use pure class Hearing him speak Is a reminder of how low we have fallen

Mervyn King was one of the finest Governors we have ever had at the BofE. Humble, thoughtful and deeply knowledgeable. We were very fortunate to have had had both Mervyn King and Alistair Darling at the helm during the 2008 banking crisis. People have short memories. A very refreshing interview.

They got real trouble now because the real economy of the price of raw materials, wages and output, which had , since 2008, been kept in the background by central banks over -printing money, and smothering interest rates as a valid economic lever, has now punctured the QE ballon and will now cause interest rates to rise to levels necessary to adjust to the recent rises in input prices in the real economy. Effectively, central banks have been running two sets of books, one for the financial economy and one for the real economy, where the status of the latter didn't matter as long as resource and labour prices were unrealistically low and was optimised, where possible, to maximise the excuse for printing more money for the financial economy to use. Now comes the triple whammy rising resource prices, a shortage of labour and over-heated asset prices courtesy of the over activity in the over-financed finance market. Get out of that one. Given that governments have for a long time been divorced from central banks, who this time has been giving the instructions to get us to this situation . . . The profiteering vandals in the financial markets and those attending Davos who, its reported are only too keen to throw the "Useless eaters" under a bus. Funny that the few who cause all this disruption and who are the real "Useless eaters" always find justification for their existence.

Lol. 2% inflation? When? Real world inflation was never that low in the UK in the last 50 years.

Had to pull the previous Former BoE Governor Sky News video to censor the comments again I see.

I note with some dismay that Mervyn King has *not once mentioned the effects of Brexit on UK trade in both goods and services.* But then, this is Sky News, owned by Rupert Murdoch, who is a fanatic Brexiteer. Recently *Adam Posen (former policy make for the Bank of England) said that 80% of the current economic problems in the UK are the result of Brexit.* Because the UK is no longer in the Single Market and the Customs' Union, exports in particular have been hit very badly. On top of that, there is a labour shortage and a skills shortage because Freedom of Movement has been stopped. There simply are not enough skilled and unskilled workers now that so many EU citizens have had to leave the UK after Brexit. True, there is something akin to full employment - but all too many jobs are so poorly paid in relation to the cost of living that huge numbers of people in full-time work are having to rely on food banks just to survive. And yet, multinationals such as Apple, Microsoft, Glaxo Smith Klein, etc. are only paying a minute fraction of the tax which they should be paying, even under existing UK Tax Law. If this were done, the NHS could be properly funded, a massive social housing scheme (building new affordable council houses to rent) could be achieved, social welfare, social care, legal aid, the armed services, the police, etc would all be properly funded. But this is not happening. The problem is more of slavishly following a severe and extreme Neoliberal/Free Market economic model than that of a Mixed Economy with progressive policies. If we did the latter, people would have more disposable income and the economy would pick up. The other point where I feel Mervyn King is wrong is that inflation is always caused by a demand for higher wages. This is arse about face. The demand for higher wages come as a result of inflation, such that people need to be able to afford to pay their rent, mortgage, food, fuel and energy bills. The only sectors which have continually clamoured for higher wages have been in the banking and financial sectors - in particular the speculative or 'casino' banking.

The first "mistaken idea" as he calls it was to take the dollar off the gold standard by Nixon in August 1971.

Wages rising at 5-7% per year? Err.... Merv, where is this happening please? Many Public sector workers have had no payrise over the last 8-9 years!

I remember 19% inflation in the seventies where my bank savings dissolved into nothing. We were constantly told by the politicians that caused it that it had a good side. Well that was where I learnt to hate with a purity, politicians and smart arse academics

If the UK government is serious about becoming self sufficient in energy they would mandate that every building being currently built is south-north facing and has solar panels/ film and batteries fitted. Government would also mandate that every building has solar generating panels & batteries fitted retrospectively. Government would also make grants available to everyone to be able to fulfil this mandate. If every building in the UK had this kind of set up we would very quickly become 95% self sufficient in our energy demands. 95% is pretty darn good. We could certainly invest more in wind farms and explore other forms of energy, but this is an area that government could & should invest in from the ground up.

😱😨🤯 - I say we're already in recession, and the government interupted it with intervention. Now, there's no telling when it will be done because it actually started in 2020. Those ridiculously low interest rates were keeping inflation down. There's compression at the bottom of the interest curve so central banks don't realize what's happening. Low Cost, Low Prices.

We need to end all private central banks. Eliminate all debt based currency and go back to a gold backed money system issued by the government and not a private bank that issues currency at interest. And no digital currency. All cash based.

yes indeed, a very unpleasant period for the working class

"what's government's were doing was enough" like wasted 10bn on track and trace

Interest rates go up, mortgage rates go up, disposable income goes down, people demand more in pay, costs get passed on, inflation gets worse. I can’t see how slamming the break on property and increasing peoples mortgages massively helps here. Should have reversed QE, put some price caps in key areas and put rates up very gradually

I am interested that these people credit their polices for beating inflation and never mention falling good prices caused by the industrialisation of developing countries like china, just a thought !

Never before in history has there been a rapid expansion of money not accompanied with inflation. Milton Friedman

Terrific interview. Finally, a voice of reason without a political agenda. How refreshing.

Very educational, I picked up pointers that will help me - thanks for your wisdom!

Look energy is more expensive due to lowered and constrained supply of energy in one of the biggest energy markets: Europe. If fuel gets more expensive, because transport is mostly fuel based, every product becomes more expensive. The problem with our world is we think like doctors: we should cure the symptom. We should think like gardeners: we create a new tree of life, to supply our energy needs. This is the cure to inflation. Economists think only in numbers. Big problem for the western world: we are all to specialized in what we do, so links with other domains are very easy to miss.

Everything that has happened in the last 2 years has all been by design,the cargo ship stuck in the canal,Covid,The vaccinations,The war in Ukraine,Monkeypox,rampant inflation,are the central banks really that incompetent?,given the fact valuable lessons could of been learnt from such recent history.

“I don’t give advice to my successors, and I’m not prepared to do that”. What a classy and measured response. A lot of people would relish the opportunity to put their stamp on things and espouse their opinion, not this chap, brilliant.

Melvyn King absolutely destroyed the economy by not letting Lloyds acquire Northern Rock because of Moral Hazard, then embarked on the greatest episode of Moral Hazard of all time

Mr Smug was in charge of the Bank of England in the run up to the biggest banking crisis in UK History. It''s amazed me ever since that he walked away untainted. Can anyone explain this? It's galling to hear him offering his 'expert' opinion on other crises.

I wonder how many people will watch this then drive right to Starbucks for an expensive coffee

Mervyn King caused the first recession and then hired Mark Carney, another Banker Gambler and now he's telling us how to behave, the public is pure 🐑!!!

Excellant interview!super interviewer asks questions too point.Finally a banker who tells truth on inflatation and money printing

One of the best, simple, truthfull interviews I ever heard !!!

Brexit! Brexit! Brexit! The elephant in the room! Yet no mention of it?

No one seems to be allowed to mention the devastating effect of Brexit, probably the single most important factor in the expected collapse of GB

Can anyone tell me? With rising inflation and then a recession or global depression as some have forecast; What will happen to UK house prices? Appreciate your input and replies!

After filling my vehicle up and a little grocery shopping i would be OK 👌 with a little bout of Deflation So give us some ideas of what do we do if we’re living paycheck to paycheck and our wages aren’t going up are we just going to have a massive global conflagration that makes it worse or will a depression give us some relief by getting deflation started