David Milliken

LONDON, (Reuters) – Former Bank of England Governor Mervyn Kings said Friday that the inflation surge is due to central banks and the BoE being too quantitatively easing since the pandemic.

From 2003 to 2013, King headed Britain’s central banking institution. In March 2009, King oversaw QE’s launch during the global financial crises.

In recent years, he criticised central bank asset purchase plans. These purchases were made with newly created money.

He said, in comments to Sky News, that “when you make an intellectual error in policy and allow inflation to increase, it can lead to very unfortunate outcomes.”

As recently as July, British consumer inflation was above its 2% target. However, it reached a record high of 9.0% for the first time in 40 years in April. Inflation in the United States hit 8.5% in February, its highest point since 1981.

Although central banks note supply-chain problems and an increase in energy prices due to Russia’s invasion in February of Ukraine, critics argue that inflation may also be evidence of excessive monetary or fiscal stimulus in the COVID-19 pandemic.

Pierre Poilievre (a prominent contender for Canada’s Conservatives’ head) has threatened to dismiss the Bank of Canada Governor if he is elected to office in 2025.

A number of British prime minister Boris Johnson’s lawmakers have expressed doubts regarding the BoE leadership, as they are increasingly under pressure about living costs.

King, now an independent member, is currently a member of Britain’s upper house and chairs its economic affairs committee.

Many economists don’t believe central bank money printing is the main reason for current inflation.

King said that BoE interest rate may have to increase well past the 2% mark, which many economists view as a peak.

It takes hard work. He said that it was not an easy period.