Andy Burnham Needs Bold Ideas to Lead the UK Says Ex-BOE Governor King

Summary

Former BOE Governor Mervyn King discusses the economic challenges facing UK Labour leadership hopeful Andy Burnham. He argues Burnham needs bold intellectual convictions to explain difficult fiscal decisions. King is optimistic that UK growth will return to the pre-crisis trend of around 2%, as the end of ultra-low rates allows resources to shift from zombie firms to productive ones. He also stresses the need to raise national savings and redirect spending from consumption to investment.

• Mervyn King says Andy Burnham must develop clear economic convictions to lead the UK.
• King believes UK growth will return to roughly 2% pre-financial-crisis trend regardless of government.
• The growth thesis hinges on normalization of interest rates, ending the survival of unproductive firms and restoring productivity-enhancing reallocation.
• King argues Britain saves too little national income and must reduce consumption to boost investment and exports.
• He highlights tough policy questions ahead: defense spending, the pension triple lock, and social care reform.