Odds slashed on Crockett to be the Bank's new Governor

The odds on Andrew Crockett taking over as Governor of the Bank of England were slashed yesterday after he announced he was quitting as head of the Bank of International Settlements.

Mr Crockett surprised the markets by disclosing he would step down next March as general manager of BIS, a bank that acts as a forum for central bankers.

Analysts seized on the timing of his move, which will leave him available ahead of Sir Edward George's retirement next June. The announcement triggered a betting frenzy in the City. Cantor Index cut its odds from 12-1 to 8-1 and then a few hours later to 5-1. Mr Crockett had started as a 20-1 outsider.

"It is down to two or three names and Crockett is number two," said one City economist who used to work in the Bank.

The favourite in the race is Sir Edward's deputy, Mervyn King, who is the 2-9 "hot" favourite. The other contender is Sir Howard Davies, the head of the Financial Services Authority, at 7-2.

Ciaran Barr, the chief UK economist at Deutsche Bank, said Mr Crockett would be a good choice for his contacts and international experience.

"Speculation will undoubtedly increase that this clears the decks for him to have a nice holiday before taking over the reins at the Old Lady," he said.

Mr Barr pointed out Mr Crockett was an executive director at the Bank between 1989 and 1993 and spent 17 years before that at the International Monetary Fund.

However Mr Crockett gave no clues to his future: "I have no plans as to what I will do and I don't intend to make any plans until I have left here. That's all I am going to say."

The final decision will be crucial, as the new Governor may oversee UK entry into the euro. "If we join then the Governor's job will be mainly about financial stability rather than monetary policy which would make Crockett a good fit," a City economist said.

Mr Crockett's announcement came as a surprise to BIS staff, who were only notified by e-mail on Sunday night. He will step down nine months before his term was due to expire.