Mervyn King is to be the next governor of the Bank of England.
The news was revealed as Gordon Brown announced his pre-budget report to the House of Commons at 3:30pm today. King will succeed current governor Sir Edward George in June 2003.
The announcement ends speculation that FSA chairman Howard Davies was next for the post, and accompanying rumours that CML director general Michael Coogan might step into Davies' shoes.
Brown has downgraded his hopes for UK economic growth – admitting for the first time that it will not meet his forecasts.
Delivering his pre-Budget report to MPs, Mr Brown said growth this year would be 1.6%. He forecasts inflation at 2.25% next year, 2.5% in 2004
Extra borrowing is also on the cards in an attempt to counter the expected economic slowdown.
Brown added that consumption was forecast to rise by 2.25% in 2003, and that house price growth would slow.
The Chancellor began by saying the UK economy remained one of the fastest growing last year despite the worst world-wide economic slowdown for almost 30 years.
The pre-Budget report is one of the key moments of the economic year, as the chancellor sets out in advance his approach to the full Budget the following spring.
Clive Watkins, sales and marketing director at Derby-based Members Mortgages, says: “The inflation predictions seem entirely reasonable. A slowdown house in house price growth is inevitable, a 20% per annum rise is simply unsustainable. As long as prices keep rising a little I think everyone will be happy.”
Look out for more budget analysis online tomorrow and in the next issue of Mortgage Strategy magazine, out on Monday, December 2.