Mervyn King named next governor of Bank of England

King was a founding member of the Banks Monetary Policy Committee and was appointed deputy governor in June 1998. Speaking on Wednesday he said he was "delighted and honoured" to be asked to serve as governor.

Sir Edward George welcomed the appointment of Mervyn King as his successor. "Throughout my period as Governor Mervyn has given me immense support in our efforts to maintain monetary and financial stability. I have every confidence that the Bank will persist in these efforts under Mervyn's leadership and that I will leave the Bank in safe hands."

Mervyn King, who studied at Cambridge and Harvard, said it would be difficult, if not impossible, to follow Sir Edward's stewardship of the Bank. George, he said, has led the Bank through the crucial years before and after independence. He thanked the staff of the Bank saying it was their work that has made today possible for him.

Recent comments from King on house prices and the Bank of England's role in their control caused concern as he warned of a significant negative correction in UK house prices over the next couple of years but went on to say that it was not the Banks job to get involved and prevent the formation of asset price bubbles.

Several others had been in the frame for the top job at the Bank with Howard Davies, Chairman of the FSA and Andrew Crockett of the BIS seen as genuine contenders. Howard Davies recent decision to step down at the FSA and Crockett's impending departure heightened speculation that the next Bank of England governor would be appointed from outside the Bank but King's appointment will certainly not come as a shock.