In an exclusive interview with ePolitix.com, Mervyn King, the deputy governor of the Bank of England, has predicted that the UK economy will feel a knock-on effect from the slowdown in the US economy. Ha says: "We'll take those into account when we make our next forecast or projection in the February inflation report."

He argued that some slowing in the global economy "is a rather welcome development" - for example in the effect it has had on reducing oil prices, though he admitted that trade will also be affected.

Turning to international developments, he noted that it would be "helpful if Japan were to recover more rapidly than it is at present". He also hoped that too sharp a slowdown in the EU economy could be avoided.

King defended the Monetary Policy Committee (MPC) against criticism that it should have followed the lead of the US Federal Reserve and cut UK interest rates at its last meeting. "I think our track record over three-and-a-half years now suggests that we have no hesitation in changing interest rates when we feel it appropriate to do so," he argued.

He also strongly defended the composition of the MPC following suggestions that industrialists and market makers should be better represented. "The kind of person who is well equipped to run a particular factory may not be the person best equipped to do monetary policy...it's a big mistake to equate these two jobs, they are quite different," he said.