AS he was being driven along the Embankment away from Westminster one spring day in 1997, Eddie George, governor of the Bank of England, began composing a resignation letter in his head.

Just two weeks after the Bank had been granted independence by the new Labour government, George, who died yesterday aged 70 after a long battle with cancer, had been informed that he was about to be stripped of most of his regulatory responsibilities through the creation of a new City watchdog – the Financial Services Authority.

Granting the Old Lady of Threadneedle Street her freedom had been greeted with surprise and pleasure by George, but this news, broken in a tense meeting at the Treasury with Gordon Brown, the new chancellor, was far less welcome. The governor, never afraid to speak his mind, was furious, not least because he had only recently reassured his staff that their jobs were safe. It took placatory words from colleagues at the Bank before he calmed down.

He finally abandoned the idea of quitting and “Steady Eddie” George stayed on for six more years, earning his nickname for presiding over an unprecedented era of financial stability.

During his initial five-year term, George saw the economy grow consistently every quarter. At a speech in 1999, he was able to boast that it had expanded every quarter for seven years. By the time he stepped down in 2003 after a decade in the post he had presided over 40 consecutive quarters of GDP growth.

However, he later admitted that the Bank had deliberately stoked the consumer boom that led to spiralling house prices and personal debt in order to stave off the onset of recession.

“We knew that we were having to stimulate consumer spending,” he said. “We knew we had pushed it up to levels that couldn’t possibly be sustained into the medium and long term.” The choice of George to succeed Robin Leigh-Pemberton in 1993 was seen as a chance for the Bank to reestablish its reputation as an important counterweight to the Treasury’s power over interest rates. In his time as deputy governor, George had made clear his belief in strengthening the Bank’s role.

He was no stranger to controversy, having seen the Bank of Credit and Commerce International (BCCI) and Barings collapse when he held key supervisory roles. Despite his early misgivings, George spoke out last year to warn against hasty regulation to address the failings highlighted by the credit crunch. Going back on the tripartite system of regulation imposed in the early days of the Labour government would be a mistake, he said, as would returning the Bank to its supervisory role.

It was his words, not actions, though, that stirred some of the strongest feelings. In the late 1990s George remarked that job losses in the north of England were helping to bring inflation under control. He also became a darling of the antieuro lobby, for repeatedly casting doubts on the benefits of British membership of the single currency.

“We could have been the elephant in the rowing boat,” he once told a business audience, when asked what would have happened had Britain signed up to the euro.

George always stayed true to his south London roots. As a boy, he won a scholarship to Dulwich College before going on to graduate in economics from Emmanuel College, Cambridge.

He joined the Bank of England in 1962 and spent his entire career there. A keen card player, it is said that he initially got the job because of his bridge-playing.

His smoking was legendary. George almost always had a cigarette in hand and was often spotted in airport lounges hastily taking a last drag before boarding the plane.

He retired to Cornwall and became honorary chairman of the Community Foundation Network, which connects charitable donors with beneficiaries.

“I am deeply saddened to learn of Eddie’s death,” said Mervyn King, the present Bank of England governor. “He served the Bank for more than 40 years and was an outstanding governor, colleague and friend. Eddie will be remembered as the governor who led the Bank to independence.”

George is survived by his wife Vanessa and their three children.

LIFE AND CAREER

Born: September 11, 1938

1962: graduates in economics from Emmanuel College, Cambridge

1962: joins Bank of England

1990: promoted to deputy governor

1993: appointed governor of the Bank of England, a post that he holds until stepping down in 2003

1997: Bank of England granted independence

2000: knighted

2004: made a life peer

Died: April 18, 2009

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