Wisdom, wit and gaffes from the Governor

After a decade at the helm Sir Edward George retires next week as Governor of the Bank of England
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Sir Edward George, the Governor of the Bank of England, yesterday bared his soul to the Treasury Select Committee for the last time before he makes the transition from "Who's Who? To Who's He?", as he put it in his recent Mansion House speech, and hands over the reins to Mervyn King. Living up to his "Steady Eddie" nickname, the Governor showed no signs of being demob-happy, despite encouragement from MPs, striking his customary relaxed tone for his 49th appearance under the parliamentary spotlight. His reticence, which has gone hand-in-hand with a decade of uninterrupted economic growth, eventually prompted MPs to wonder whether we could look forward to hearing more forthright views from the 64-year-old once he retires from the Bank on Monday.

Until then, let The Independent guide you through some of Sir Edward's "thoughts" and some other thoughts about Sir Edward, renowned central banker, after-dinner speaker, keen sailor and chain-smoker.


Sir Edward, making a sales pitch, at the Finance and Leasing Association dinner, 24 March 2003: "I, myself, of course, will be looking for a new lease of life in retirement! I'm not aware that it's a lease product any of you actually provide. Given our ageing population perhaps you should develop one - though you'd better be careful how you market it!"


Sir Edward, speaking on the BBC's Breakfast with Frost, 22 June 2003, on the possibility of the housing crash: "Cows can always fly, though we think that's unlikely." And again to a Scottish newspaper in January 2003, describing how he did not expect UK consumer spending to slump: "Cows could fly, but it is not the most likely outcome."


The interest rate cut in February 2003 ended a 14-month run of inaction by the Monetary Policy Committee. But as far back as November, Sir Edward's family had awoken to the fact that the Governor was having something of an easy life. Sir Edward confessed at the time: "My children say: 'Daddy, what on earth are you doing? Will they continue to pay you?'"


Speaking at the 2002 Mansion House banquet, Sir Edward revealed another reason why he would never forget the date September 11: "[It], coincidentally, used to be celebrated as my birthday."


Sir Edward, displaying his Shakespearean aspirations at the inaugural dinner of the Guild of International Bankers at Mansion House, July 2001:

"Now let us give thanks

For international banks

And the role that they play in the world;

Though misunderstood, and sometimes abused,

They channel resources to where they're best used,

So the banner of growth is unfurled.

And let us tonight

Take pride and delight

In the City's most novel creation,

That strengthens the unity

Of our world financial community

Surrounding Bank Underground station.

So please be upstanding, with the glasses filled,

Let's toast the International Bankers Guild."


Sir Edward and what nearly wasn't, writing in Cam magazine in March 1999 about his days at Cambridge and how he never followed up his early desire to work for an aid agency: "The night before I was due to see a Bank chap on the 'milk round', I was playing bridge against a man - a complete stranger who came up with a 'psychic bid'." Predictably enough, the stranger turned out to be the interviewer and Sir Edward got the job. "We spent an hour and half talking about bridge," he wrote.

Writing in the same Cam issue about how he failed to get a scholarship for Clare College, Cambridge. "I was asked by the master about sport. 'Do you play cricket?' he asked. I said I did. 'Bat or bowl?' I said I bowled. 'What sort of bowler?' So I picked up his inkstand to show him my offbreak and the ink went everywhere." Happily he was offered a place at Emmanuel College (where, according to Kenneth Clarke, he spent most of his time playing rugby).


Sir Edward, described by one close friend as "agnostic about the euro", told a House of Lords Select Committee on the European Central Bank in January 1998: "If I were told 'Because you are not in the euro, I will not locate an activity in the UK', my response would be to sell the company's shares, because, frankly, that is only one element in a very complicated equation and it is not typically the decisive element."


Sir Edward's biggest, and friends say only, gaffe came in October 1998. He faced calls to resign after apparently agreeing that unemployment in the North of England was an acceptable price to pay for curbing inflation in the South. Asked at a regional newspaper lunch whether he was saying unemployment in the North-east was a price worth paying to curb inflation in the South, he replied: "Yes, I suppose in a sense I am." (He later issued a statement expressing "disappointment" at the "misinterpretation" of his remarks, adding: "In fact, I said explicitly that rising unemployment in the North-east was undesirable."


On his accession to Governor, the Bank gave Sir Edward the use of what associates describe as a "very nice flat" in the City, bedecked with Chinese wallpaper dating from the 17th century. Hugely historic and valuable, it failed to tickle Sir Edward who had not wanted it in the first place. Kenneth Clarke remembers it as the venue for the "Ken and Eddie" show. "He mainly used it to have lunch once a month with me," he says.

Speaking at the May 1995 public inquiry into a possible fifth terminal at Heathrow airport, Sir Edward said: "I have nothing against Heathrow and Gatwick - except the location."

The Barings Bank crisis in 1995 proved a particular headache for Sir Edward, who lists "family" as one of his recreations in Who's Who?, because he was forced to cut short a skiing holiday in Switzerland with his wife and then teenage children.

And, finally, a favourite joke: "There are three sorts of economists. Those who can count ...( pause). And those who can't."



The later years of the Major government were enlivened by the "Ken and Eddie" show - monthly meetings between the Governor and the Chancellor at the time, Kenneth Clarke, back in the days before the Bank was granted independence.

Mr Clarke revealed: "The only really serious disputes I had with Edward were over who had the ashtray during the interest rate decision meetings."


Sir Edward, known for his taste in dry martinis, was unmasked as a secret scotch drinker by Gordon Brown at the Confederation of British Industry dinner on 20 May 2003. He recalled Sir Edward presenting prizes at a charity raffle. Asked if he wanted a drink, the Governor helped himself to a bottle of scotch, only to discover it was a 1937 vintage Glenfiddich earmarked as the top prize. "Eventually, after he'd had a few glasses, somebody had to tell him that he had drunk the main prize. In true central banker style, he presented the bottle nevertheless and described it as half full rather than half empty," the Chancellor said.