Blanchflower spat with King heats up

DAVID Blanchflower, the former Bank of England Monetary Policy Committee (MPC) member who accused Mervyn King earlier this week of running the central bank with an &ldquo;iron fist&rdquo;, claimed yesterday that he was merely speaking out in the public interest.<br /><br />Blanchflower was responding to comments from King made during an evidence session at the Treasury select committee, where he said that the former MPC member&rsquo;s decision to go public with his criticisms was &ldquo;unwise&rdquo; and &ldquo;not sensible&rdquo;.<br /><br />&ldquo;It&rsquo;s what the British people should expect from an independent member of the MPC. I realised the MPC had made a mistake that needed correcting so I spoke up,&rdquo; Blanchflower said in comments on the blog of the New Statesman magazine.<br /><br />The war of words began when Blanchflower said in an earlier interview with the magazine that the MPC had been &ldquo;hobbled by groupthink&rdquo; due to the &ldquo;tyranny&rdquo; of King&rsquo;s leadership.<br /><br />Blanchflower, who was the only MPC member to call consistently for rate cuts before the full extent of the financial crisis was known, also disputed King&rsquo;s assertion that rate cuts would have made little difference.<br /><br />&ldquo;If, as King argues, cutting rates earlier would have done little, then I guess his view is that we do not need an MPC at all,&rdquo; he said.<br /><br />And in an email to City A.M., he wrote: &ldquo;History will determine who was right.&rdquo;