The rise, settled by a remuneration committee of external directors of the Bank chaired by Sir Adrian Cadbury, would take the salary of Britain's highest-paid public servant to pounds 230,000 a year if it were to be in line with top private sector executives.
Mr George, who takes over as Governor from Robin Leigh-Pemberton on 1 July, is sympathetic to the committee's view that Bank salaries cannot be allowed to get out of line with those that its staff could command elsewhere, but is also aware of the furore that may ensue.
He is considering agreeing to a freeze on his pay for the whole of his five-year term, a gesture aimed at drawing the sting from public criticism and reinforcing the Bank's commitment to low inflation.
The last published figure for the Governor's salary referred to the year ending 28 February 1992 and was pounds 198,546 a year. The present Governor waived some pounds 34,135 of his salary that year after a row over a 17 per cent increase in 1991. That meant the deputy Governor, Mr George, earned a little more than the Governor at pounds 164,910.
In the past when Bank pay has drifted out of line with the rest of the City, the central bank has suffered senior defections such as that of Sir Kit MacMahon to Midland Bank, Rodney Galpin to Standard Chartered Bank, Sir David Walker to the Securities and Investments Board, and Anthony Loehnis to the investment bank S G Warburg.
The Bank's remuneration committee comprises four non-executive members of the Bank's Court: Sir Adrian, whose recent report on corporate governance set out guidelines for boardroom pay; Sir Colin Corness, chairman of Redland, the building materials producer ; Gavin Laird, general secretary of the engineers' trade union; and Sir David Scholey, chairman of S G Warburg.
Top pay has continued to rise well ahead of inflation, especially in the financial sector. According to Remuneration Economics, which prepares the Institute of Management's annual pay survey, the rise in top directors' pay in 1992 was 9.3 per cent, with another 7.2 per cent in the current year.
Mr George's lifestyle is far removed from that of Britain's boardroom stars. He is a career bank official who lives in a semi-detached house in Dulwich, south London.
His pay rise would maintain the Governor's position at the top of the public sector pay tree. Sir Bob Reid, the chairman of British Rail, receives pounds 200,000; John Birt, the BBC director general, pounds 190,000; Sir Terence Burns, the Treasury's permanent secretary, pounds 108,940, and John Major, pounds 76,227.
A Treasury spokesman said that the Bank was, in principle, covered by the 1.5 per cent pay ceiling, but that it was not always easy to enforce the limit. The ceiling applied to groups of people, so that some could have more if others had less.
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