The next governor of the Bank of England is to be Mervyn King, the current deputy governor, who will step into the job next summer.

The announcement was made by the Chancellor of the Exchequer Gordon Brown in his pre-Budget report.

"I can assure the House the same steady grip will continue," Mr Brown told the Commons.

Mr King will take over when his boss, Sir Edward George, steps down at the end of June next year.

House price warning

Mr King, aged 54, joined the Bank as its chief economist in 1991.

He is seen by economists as one of the more hawkish members of the Bank's nine member interest rate setting committee.

Mr King is thought unlikely to support any further cuts in interest rates, and he recently warned that the housing market risked overheating.

In a speech last week at the London School of Economics, Mr King warned of a "remarkable imbalance" in the UK economy and said the current strong UK housing market could not continue forever.

He highlighted the contrast between the "buoyant consumer and housing sector on the one hand, and weak external demand on the other".

'Difficult to follow'

Mr King has long been one of the front-runners to become governor when Sir Edward retires.

Mr King said he was delighted and honoured to be offered the job of Governor of the Bank of England.

He paid tribute to Sir Edward, saying it would be "difficult, if not impossible" to follow in his footsteps.

For his part, Sir Edward said he was leaving the Bank "in safe hands".