King says living standards may never recover from the crisis

Bank of England Governor strikes dovish note on timing of interest-rate increase

By Sean Farrell
Wednesday, 2 March 2011
http://www.independent.co.uk/news/business/news/king-says-living-standards-may-never-recover-from-the-crisis-2229570.html
The Independent

The Governor of the Bank of England warned yesterday that living standards may never recover from the financial crisis and that households were only just starting to feel the full impact of bankers' mistakes.

Mervyn King told MPs that ordinary people were not to blame for the pain ahead and that he was surprised there had not been more public fury.

"It is not like an ordinary recession where you lose output and get it back quickly," the Governor said when asked if the country would ever recover from a squeeze on living standards on a scale not seen since the 1920s.

"You may not get it back for many years, if ever, and that is a big long-run loss of living standards for all people in this country."

Mr King said that unlike previous recessions, the economy had not needed a shake-up to get industries out of state control or weaken union power and that the people bearing the most pain are blameless.

"They can't look at this and say, 'Okay, something was wrong that has to be put right' and they don't get bonuses on the scale of people in the financial services sector," he told the House of Commons Treasury Committee.

"The cost of this crisis is only now being felt. I'm surprised that thedegree of anger hasn't been greater."...continued follow link above