Rumours of rift between Treasury and PM

Tensions between the Prime Minister, Bank of England and Treasury are bubbling away. Bank governor Mervyn King sided with the chancellor yesterday as he appeared before a Treasury select committee and warned Gordon Brown that the UK could not afford a second economic stimulus package. Meanwhile Mr Brown told European MEPs in Strasbourg that the EU had to take the lead in rehabilitating the world economy and before next week’s meeting of G20 leaders is calling for them to bring forward fiscal stimulus packages to back the world’s economies.