Chief Executive’s Blog: Oh. Bugger.

Extracts from Mervyn King’s speech on Tuesday this week: “The world economy is now coming out of recession. But the cost of the banking crisis has been high. … there is a long period of healing ahead.” “Over the next few months, the data are likely to be dancing particularly vigorously under the influence of the reversal of the VAT cut, a turnaround in the stock cycle and even the effects of the recent cold weather.” “The patience of UK households is likely to be sorely tried over the next couple of years.” “So how will 2009 be remembered? As I said at the outset, it is too early to tell. The full impact of the financial crisis has yet to be seen. And the national statisticians will take another two years or so before providing their best estimates of spending and output in the UK economy. More importantly, the question of whether basic reforms to the  structure of banking and the international monetary system will be made before another crisis engulfs the world economy remains unanswered.” Bear that in mind when the economic numbers are trumpeted next week. Actually, in contrast to the sombre message, the speech is astonishingly light in tone for a central banker.  Using “Sudoku for Economists” to explain the interdependence of economies is simple, illuminating and brilliant.