BANK OF England governor Mervyn King’s favourite way to spend a summer day is at Wimbledon, watching the tennis, or at Lords, enjoying the cricket. A tetchy performance by him at the Treasury Select Committee yesterday could conceivably be explained by his missing some sporting event, but then King is a man with lot on his mind.

The economy of the UK – Ireland’s biggest trading partner – is sinking deeper into the quagmire. On Monday the International Monetary Fund – which last week gave Ireland a gold star for its deficit-reduction programme – slashed its growth forecast for Britain more dramatically than for any other industrialised nation.

According to IMF estimates, the UK economy will grow by just 0.2 per cent this year, compared with gross domestic product growth of 0.5 per cent in Ireland. Britain entered a double-dip recession in the first quarter and even reaching that modest forecast will require strong growth in the second half.

Yesterday, in a rare piece of good economic news, government figures showed inflation fell sharply to 2.4 per cent in June, its lowest level since November 2009. A fall in the price

of clothing was a key factor. Retailers have been hit hard by months of near-constant rain. But the economic silver lining is that shops have had to heavily discount ranges that were not designed for the deluge, offering shoppers some real bargains.

But by Friday the economic news will have turned bad again with government figures expected to show public sector borrowing rose sharply last month, reinforcing concerns about the UK’s deficit, which is 65 per cent of GDP and rising.

We will discover what King and the other members of the Monetary Policy Committee think of the economy today when the bank publishes the minutes of its July interest rate-setting meeting.

The committee has held interest rates at 0.5 per cent since March 2009 and this month voted to pump a further £50 billion into the economy through quantitative easing, so we can assume it takes a bleak view of growth prospects.

In a globalised economy, King and chancellor George Obsorne have few levers they can pull. The one avenue open to King is a further round of quantitative easing. Economists expect those banknote-printers to be cranked up again before the end of the year.

An appearance for the Parliamentary Treasury Select Committee is London’s modern-day equivalent of a public stocking, and yesterday King was fractious with MPs who are finally getting the hang of their role as inquisitors in the Blame Game.

King was repeatedly asked why he failed to deal with the banks which were misreporting the London inter-bank offered interest rate (Libor) when US treasury secretary Tim Geithner, the former head of the New York Federal Reserve, raised the issue in 2008.

His answer was that first, there is a world of difference between the mere “misreporting” Geithner told him about and the sort of fraud we now know some banks were engaged in. Second, King told hostile MPs, it was the British Bankers’ Association’s job to monitor Libor, not his. Third, he had in any event told the Treasury Select Committee itself about it back in 2008.

All of which sounded a bit like “the dog ate my homework”, from a man responsible for UK financial stability.

King is due to step down as governor next June and the two men most likely to replace him – Lord Turner, the head of the Financial Services Authority, and Paul Tucker, the Bank’s deputy governor – also gave evidence to MPs yesterday. Sadly, neither made a great impression.

The committee released a series of emails ahead of the hearing in which Tucker told former Barclays boss Bob Diamond he was “very proud” of his appointment as chief executive of the bank and called the American “an absolute brick”. The close relationship the emails suggest is embarrassing rather than damning, but they will compound suspicions that Tucker was complicit in the misreporting of Libor during the financial crisis.

Meanwhile, it emerged “nice guy” Lord Turner fluffed the delivery of the message that Diamond must go.

Lord Turner approached Barclays before its chairman Marcus Agius resigned to tell the bank Diamond’s reputation was “holed below the waterline”, but somehow this was misinterpreted as meaning that someone has to fall on their sword and Agius would do just as well.

Agius’s subsequent resignation took King and Turner completely by surprise. The governor, deciding that if you want something done properly, you have to do it yourself, then went in to clear up the mess himself. Perhaps we will miss him when he goes after all.

Helen Power is a freelance journalist