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King to reign for further five years

Mervyn King has been reappointed as governor of the Bank of England for a second five-year term.

He became governor in July 2003 after being deputy governor from 1998 to 2003.

Chancellor Alistair Darling says: “Mervyn King has played a key role in delivering macroeconomic stability in the UK and his leadership and experience will continue to prove invaluable to the Bank of England.”

Liberal Democrat Shadow Chancellor Vince Cable says the move is welcome but attacks the way the Government handled the reappointment.

He says: “There appears to have been a concerted campaign by 10 and 11 Downing Street to undermine King’s position. The Government’s announcement that the failing FSA and not the Bank of England will have more powers on the same day that Mervyn King is reappointed is clearly meant as a deliberate slap in the face for him.”

Darling has given further details of the reforms to the monetary policy committee appointment process that the Government outlined last July.

The Treasury will publish a timetable for the appointment of an external MPC member before a vacancy becomes available, giving the Treasury select committee three months to question the proposed member in pre-com-mencement hearings.

If an external member is reappointed for a further term, this intention will be announced sufficiently in advance of the end of that member’s current term.

Reappointed members will undergo a pre-commencement hearing in the same way as new members, ensuring that all members are subject to regular Parliamentary scrutiny.

In his last days as Chancellor, Gordon Brown reacted to strong criticism from the Tories that the selection process for external MPC members was too secretive by announcing plans to advertise these positions publicly as they become vacant.

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