The Bank of England is to move its West country headquarters back to Exeter more than 150 years after it left the city.

Deputy Governor of the Bank Mervyn King announced the move to Exeter during a factfinding trip to Devon.

It marks a return to the city which was home to an office of the Bank from 1827 to 1834.

The Bank's old headquarters in Exeter - at 18 Southernhay Place - closed when it moved to Plymouth to cater for the Royal Navy.

Mervyn King announced the move to Exeter

And although the office will bring with it just a handful of jobs it is being hailed as an important step for the city.

Mr King told Business Week magazine: "We think this is the right place to base our operation and I hope Exeter will welcome the Bank of England's presence.

"We haven't got large numbers of people, but I think that the Bank of England is a pretty good brand name."

Regional offices

The Bank's main base in the South West will switch from Bristol to Exeter in January 2003, although it will keep an office in Bristol.

The decision to move further west was taken because the Bank wanted to be at the centre of the region rather than the eastern edge.

The Bank of England's new West country home

Kevin Butler, who will take over as the Bank's agent for the South West in January, said: "The Exeter base, in the centre of the region, will help to increase the Agency's network of business and other contacts.

"This is the principal source of the information which the Agent reports to the Bank's Monetary Policy Committee."

Chris Harris-Deans, West Country president of the Securities Institute, said: "We are delighted that the Bank of England is establishing a new regional office in Exeter.

"This is welcome recognition of the importance of Exeter in the south west region."

The Bank of England has twelve regional agencies across the UK allowing it to keep in touch with local financial and business matters.

Its agents ensure the Monetary Policy Committee, which is responsible for setting interest rates, stays up-to-date on economic developments across each area.