Bank of England governor Mervyn King has backed the new government's deficit reduction plan, calling it "strong and powerful". Mr King said plans for spending cuts worth £6bn in 2010 were "sensible". Investors also gave a cautious welcome to the new government - with UK bond prices rising, although sterling weakened. Meanwhile, earlier Conservative plans to scrap the Financial Services Authority have been shelved.
Mervyn King took the unusual step of praising the new government's plans at the Bank's quarterly Inflation Report media conference. He said the measures planned by the Conservatives and agreed by the Liberal Democrats demonstrated a commitment to cutting the deficit. He also implied that the previous Chancellor Alistair Darling had not gone far enough with his Budget policies. Wanker.
Mr King warned that recent events in the eurozone had shown how quickly markets could turn against a country which was seen to lack credible plans to cut borrowing.
