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Eddie George (left) may seem an unlikely Daniel but he braved the lion's den yesterday when he became the first Governor of the Bank of England to address the TUC Congress, Paul Wallace and Barrie Clement write.

Ahead of today's meeting with Kenneth Clarke, Chancellor of the Exchequer, brought forward a week because of holidays, the Governor was reported as saying at the meeting that the Government would not meet its 1997 inflation target.

This suggests that the Bank will stick to its guns in next week's Inflation Report.

The May report caused a storm when it forecast that underlying inflation would be between 2.5 and 4.0 per cent in two years' time, compared with the Government's target range set by Norman Lamont for the end of the Parliament of between 1.0 and 2.5 per cent.

To the delight and surprise of some of the senior trade unionists present, the Governor agreed with the TUC's preoccupation with job growth, telling them that unemployment was "the most urgent problem facing Europe".

He said that the impact on employment would have to be one of the main considerations in any move towards a single currency.

The Governor refused to be drawn on such delicate political matters as the national minimum wage proposed by the TUC and the Labour Party, arguing that they were outside his brief.

Mr George said he found the 90-minute discussion "valuable" and hoped the dialogue would continue.

The invitation to the Governor is part of the TUC's strategy of encouraging a "social partnership" between unions, business leaders and government agencies.

John Monks, general secretary of the TUC (right), intends to invite all the main decision-makers in finance and industry, a policy that would have been unthinkable at Congress House until recently.

Photograph: Dave Cheskin/PA