Ex-Bank of England chief warns extended lockdown could cause ‘rebellion’

The former governor of the Bank of England, Lord Mervyn King, has warned that an extended lockdown due to coronavirus could result in a "rebellion" if it is enforced for too long.

Lord King, who served as governor during the 2008 financial crisis, said it was "unrealistic" to think the lockdown could continue for "months and months on end" and called for a gradual exit strategy to protect the economy and citizens' well-being.

The comments came during a round-table webinar organised by Policy Exchange involving Lord King, former chancellor Lord Alistair Darling, former permanent secretary to the Treasury Lord Nick Macpherson and Dr Gerard Lyons, Boris Johnson's former economics adviser as Mayor of London.

The Government has announced a raft of measures in recent weeks aimed at supporting workers and businesses amid a lockdown due to the spread of coronavirus.

22 PHOTOS
Britain before and after coronavirus lockdown
See Gallery
Britain before and after coronavirus lockdown
A composite image of the streets in the centre of Bath busy with visitors and shoppers on 11/03/20 (top) and the empty streets on Tuesday 24/03/20 the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of Bournemouth beach on 28/06/19 (top), and on Monday 23/03/20 (bottom), the day Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of London's National Gallery in Trafalgar Square on 28/01/14 (top), and on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of London's Canary Wharf Jubilee Line platform on 31/01/13 (top), and on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of London's Tower Bridge on 16/03/20 (top), and on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of commuters at Waterloo station in London on 12/03/20 (top), and on Wednesday 25/03/20 (bottom), after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of ticket holders for Comedy about a Bank Robbery in line outside the Criterion Theatre, London on 12/03/20 (top), and the theatre on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of of commuters crossing London Bridge on 13/03/20 (top), and on Wednesday 25/03/20 (bottom), after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of London's Buckingham Palace during the Changing of the Guard on 13/03/20 (top), and on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of Bournemouth beach on 14/09/19 (top), and on Monday 23/03/20 (bottom), the day Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of people walking across the Millennium Bridge, London, with St Paul's Cathedral in the background, on 13/03/20 (top), and on Wednesday 25/03/20 (bottom), after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of London's Canary Wharf Station on 17/03/20 (top), and on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of ticket holders for Harry Potter and the Cursed Child in line outside the Palace Theatre, London on 12/03/20 (top), and the theatre on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of London's Canary Wharf Station on 17/03/20 (top), and on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of the streets in the centre of Bath busy with visitors and shoppers on 11/03/20 (top) and the empty streets on Tuesday 24/03/20 the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of visitors to Leicester Square, London, on 13/03/20 (top), and on Wednesday 25/03/20, (bottom), after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of ticket holders for Ticket holders for Come from Away in line outside the Phoenix Theatre, London on 12/03/20 (top), and the theatre on Tuesday 24/03/20 (bottom), the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of the streets in the centre of Bath busy with visitors and shoppers on 11/03/20 (top) and the empty streets on Tuesday 24/03/20 the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of Edinburgh's Royal Mile on 14/03/20, and on Saturday (21/03/20) after bars, pubs and restaurants were instructed to close. Prime Minister Boris Johnson put the UK in lockdown on Monday night to help curb the spread of the coronavirus.
Composite photos of people on the beach at Barry Island, South Wales, on 14/09/19 (top), and on Wednesday 25/03/20 (bottom), after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
Composite photos of people on the beach at Barry Island, South Wales, on 19/06/17 (top), and on Wednesday 25/03/20 (bottom), after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
A composite image of the streets in the centre of Bath busy with visitors and shoppers on 11/03/20 (top) and the empty streets on Tuesday 24/03/20 the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

The Bank of England also announced two interest rate cuts in recent weeks in an attempt to mitigate the impact of the pandemic.

However, Lord King suggested the lockdown could be "potentially damaging" to the well-being and mental health of citizens, particularly stressing the impact on younger people, as he urged the Government to consider its "exit strategy" for when the lockdown unwinds.

Meanwhile, Mr Lyons praised the Government's approach to dealing with the financial impact of the virus but warned it was "not simple enough".

He said: "The Chancellor said the response would be coherent, coordinated and comprehensive, but I fear it was possibly too complex.

"I think there were too many thresholds and too many delays, but do think overall he's done a good job."

Meanwhile, Lord Macpherson suggested the crisis could be used as an opportunity for new financial policies, such as a potential "health tax".

Lord Darling suggested the Government could plan for a temporary reduction in VAT in a bid to help stimulate spending after the pandemic subsides.

Last week, financial analysts warned that the economic shock caused by coronavirus is set to plunge the UK into a steeper recession than that of the financial crisis.

Economists are predicting double-digit declines in gross domestic product (GDP) that would dwarf the 6% decline seen between 2008-2009.

Read Full Story

FROM OUR PARTNERS