* King says not sure need for major change at BoE
* Comments come ahead of possible changes to bank's remit
* King reiterates case for more bond-buying
LONDON, March 15 Bank of England Governor Mervyn
King questioned the need for a shake-up in how the central bank
focuses on fighting inflation, days before Britain's finance
minister may announce a change in how he wants the bank to work.
"I'm not sure there is any call for major change in the
remit," he told ITV News on Friday. "Most important is the
commitment to the target of 2 percent (inflation)."
"Of course what we've seen through the financial crisis is
there are difficult judgments to be made about the short run
trade-offs between inflation and growth and I think it's
perfectly reasonable to ask questions about how those judgments
are made," King was quoted as saying.
Britain's finance minister, George Osborne, is expected to
announce a review of the BoE's inflation-focused remit, or
possibly outright changes to it, when he presents his annual
budget on Wednesday.
With little room to change taxes or spending because of his
austerity programme, Osborne may seek to give more room for the
central bank to loosen monetary policy further to help an
economy threatened again with recession.
King is due to retire in June and his successor Mark Carney,
currently the governor of the Bank of Canada, has called for a
debate over the role of the Bank of England (BoE).
One possible change to the BoE mentioned by economists has
been the replacement of the 2 percent annual inflation target
with a 1-3 percent range.
King, who was instrumental in creating the bank's
inflation-targeting regime in the early 1990s, said there was no
reason for the BoE to adopt another possible change to its remit
- giving the bank a target to boost jobs alongside its inflation
one, similar to the U.S. Federal Reserve's dual mandate.
King has long argued that the target does not restrict the
bank from supporting growth. The BoE tolerated inflation above 2
percent for much of the last five years as it tried to prevent
Britain from falling into a deeper slump.
As well as cutting interest rates to 0.5 percent, the bank
has bought 375 billion pounds worth of British government bonds
in an effort to spur growth.
King told ITV that more bond-buying could be in store given
the still fragile state of the economy.
"What I see are signs of a recovery, and I think there is a
case for supporting that through additional asset purchases," he
said. "One can take different views on it and some of my
colleagues do. I do think that during the course of 2013 there
are reasons to suppose that we will start to see a recovery."
King was among a minority of BoE policymakers who voted in
favour of more bond-buying by the bank at a meeting in February.
The bank again voted against more quantitative easing in March.
Details of that meeting are due to be released on Wednesday.