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GDP falls by half a per cent: King speech; ENGLAND: Newcastle:INTMervyn King (Governor of the Bank of England) to podiumMervyn King (Governor of the Bank of England) speech SOT- Ladies and Gentlemen, “When it comes to measuring success, don’t count money, count happiness”. The advice, not of a Government monitor of our wellbeing, but Ken Dodd in 1964. Unfortunately, happy is not the word to describe the global economic scene. As Tolstoy might have said: all happy economies are alike; each unhappy economy is unhappy in its own way.Happy economies combine growth, stability of prices and of the financial system, fiscal sustainability, supplyside flexibility and low unemployment. In contrast, unhappy economies are very different from each other, as we have seen in Europe recently. In Ireland, the problem was the size and indebtedness of excessively large banking and real estate sectors. In Greece the problem was different – years of weak control of spending led to an unsustainable level of public debt concealed by misleading statistics. And in Portugal,delays in announcing measures to tackle the budget deficit led to a loss of confidence among some investors and a sharp rise in the cost of financing the national debt.Elsewhere too problems vary. In the United States the main concern is the high level of unemployment. In some emerging markets the principal worry is asset price appreciation threatening financial instability; in others it is high levels of capital inflows.So should we in the United Kingdom be happy or unhappy? There is no shortage of voices reciting reasons for unhappiness. And today’s GDP figures remind us that, as I said last year, the recovery will be choppy. Of more immediate concern to the Monetary Policy Committee is that we are experiencing a period of uncomfortably high inflation. CPI inflation was 3.7% at the end of last year, and has averaged 3% since the start of 2008, above our 2% target. With the standard rate of...