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| Version 1 | Version 2 |
|---|---|
| King reappointed as Bank governor | King reappointed as Bank governor |
| (about 2 hours later) | |
| Mervyn King has been handed a second term as governor of the Bank of England, the Treasury has said. | Mervyn King has been handed a second term as governor of the Bank of England, the Treasury has said. |
| The new five-year contract begins when his current deal expires in June. | The new five-year contract begins when his current deal expires in June. |
| Chancellor Alistair Darling said Mr King, who has been in the role since 2003, had played "a key role in delivering macroeconomic stability". | Chancellor Alistair Darling said Mr King, who has been in the role since 2003, had played "a key role in delivering macroeconomic stability". |
| However, the governor has recently had a tough time, and has been criticised for his handling of the problems at Northern Rock. | However, the governor has recently had a tough time, and has been criticised for his handling of the problems at Northern Rock. |
| Tough line | Tough line |
| Confirming Mr King's reappointment, Mr Darling said that Mr King's leadership and experience would "continue to prove invaluable" to the Bank. | Confirming Mr King's reappointment, Mr Darling said that Mr King's leadership and experience would "continue to prove invaluable" to the Bank. |
| A spokesman for Prime Minister Gordon Brown said that Mr King "has been a first-rate Governor of the Bank of England in his first term and on that basis he has been re-appointed". | |
| There had been speculation that Mr King was out of favour following the run on Northern Rock, which highlighted frailties in the banking system as a whole. | There had been speculation that Mr King was out of favour following the run on Northern Rock, which highlighted frailties in the banking system as a whole. |
| Mr King initially took a hard line over the credit crunch which began sweeping markets last year. | Mr King initially took a hard line over the credit crunch which began sweeping markets last year. |
| It's unforgivable that the government has played around with him for so long Vince Cable, Liberal Democrat Treasury spokesman | |
| Financial institutions became increasingly reluctant to lend to one another because of exposure to the US sub-prime mortgage market. | Financial institutions became increasingly reluctant to lend to one another because of exposure to the US sub-prime mortgage market. |
| But Mr King argued that investors and banks should have been aware of risks, and that bailing them out with extra cash would be irresponsible. | But Mr King argued that investors and banks should have been aware of risks, and that bailing them out with extra cash would be irresponsible. |
| However, his attitude softened as the Bank joined other banks in pumping money into world markets to boost liquidity. | |
| Last week, Mr King warned that the UK economy faced its toughest challenges since 1997. | Last week, Mr King warned that the UK economy faced its toughest challenges since 1997. |
| BBC business editor Robert Peston said that Mr King's speech to Institute of Directors members in Bristol was the gloomiest he had heard from the Bank of England governor. | BBC business editor Robert Peston said that Mr King's speech to Institute of Directors members in Bristol was the gloomiest he had heard from the Bank of England governor. |
| 'Suspicion' | |
| His reappointment has been largely welcomed, with shadow chancellor George Osborne questioning why it had not been confirmed sooner. | |
| It was becoming increasingly important to remove the uncertainty surrounding Mr King's position Howard Archer, Global Insight | |
| "It is difficult to avoid the suspicion that the Prime Minister was casting around for alternatives to the independent-minded Mr King before finally being forced to accept that there was no alternative to his appointment," he said. | |
| Liberal Democrat Treasury spokesman Vince Cable said the decision was the right one but that it should have been made sooner. | |
| "It's unforgivable that the government has played around with him for so long," he told the BBC. | |
| Global Insight economist Howard Archer said that despite Mr King's recent problems, there was "no better candidate to replace him". | |
| "Furthermore, it was becoming increasingly important to remove the uncertainty surrounding Mr King's position given the increasingly stormy waters that the UK economy is sailing in," he said. |