Given our liking of the national game, TS often draws on the odd analogy, comparing football with our lives. Unfortunately for us, they mostly involve the various penalty shoot-outs that England has been ‘involved’ in over the years.
But never have we thought that one of the most famous – and disappointing – events in our rich sporting history could be used to describe monetary policy. But it has been done by Bank of England supremo Mervyn King.
At the annual Mais lecture at City University’s business school last night, Merv took the audience back to the 1986 World Cup in Mexico, when England were single-handedly demolished by two goals from Diego Maradona, one a blatant handball to all but the ref and linesman and one a work of genius.
The Hand of God goal was comparable to the old ‘mystery and mystique’ approach to central banking, he said, as the action was unexpected, time inconsistent and against the rules. His second, involving a mazy run past five England players before burying the ball in the back of the net, represented the power of expectations in the modern theory of interest rates, apparently.
Merv explained that the formerly obese cocaine addict managed to beat nearly the entire England team while pretty much running in a straight line, because the other players were expecting him to go left or right. This explains why the Bank hasn’t had to do much with interest rates recently as market rates react to where they think the official rate will go, doing much of the bank’s work for them.
So there you have it, although frankly TS just reckons the ref was blind and the England defence were a bunch of Muppets. But TS doesn’t think the Bank of England would take too kindly to that comparison.
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