Paul Waugh, Jeremy Warner and James Macintyre have varying takes on the Governor’s remarks and their bearing on the coalition's formation. I’d just observe that King may have been Cameron and Clegg’s unwitting matchmaker. But equally, no party was honest about cuts during the election. It was the great unmentionable, which would suggest that cutting had to come sooner rather than later, only admitting so would upset the election applecart.
The Tories and Lib Dems couldn’t maintain that reticence whilst negotiating a formal and lasting coalition, which would explain why Labour claim the Lib-Lab talks broke down because the Liberals wanted to cut immediately. The only mystery is why the Labour party remains in denial, especially as their position so obviously jars with the Governor of the Bank of England’s.