Inflation hawk in secret briefing

PEERS are to be given a secret briefing on Tuesday on the state of the world economy by Bank of England deputy governor Mervyn King.

The confidential brainstorming session will mark the first time a Bank official has been quizzed by parliamentarians since the events of September 11.

King, an inflation 'hawk', is expected to defend the Bank's cautious stance on interest rates, despite the world crisis.

Speaking at Birmingham University last Wednesday, he hinted that 'domestic circumstances' - booming consumer demand - prevented more aggressive cuts in borrowing costs.

His private audience on Tuesday will include some formidable economic thinkers, including Lord Burns, former Permanent Secretary at the Treasury, Lord Roll, former diplomat and ex-president of investment bank SG Warburg, and distinguished economist Lord Peston.

Other members of the Lords select committee on economic affairs include Baroness Hogg, former head of the Downing Street policy unit, and steel magnate Lord Paul.

King was originally invited to make a private contribution to the committee's wide-ranging inquiry into globalisation, one of the most ambitious projects attempted by any Parliamentary select committee.

Now, he is also expected to share with peers his thoughts on the likely impact of the war against terrorism on the British and international economy.

On Thursday, economists polled by news agency Reuters named King as the likeliest candidate to succeed Sir Edward George when he steps down as Bank governor in spring 2003. A majority said he was also their preferred candidate.