King: 'I did not fire Diamond'

Sir Mervyn King has defended his discussion with Barclays about the then boss Bob Diamond.

He said that he did not "fire anyone," but that he simply re-stated the regulators concerns.

The Governor of the Bank of England warned that any recovery would be slow and that the crisis in the eurozone had cast a "black cloud of uncertainty" over businesses around the world.

"I think it's this black cloud of uncertainty which is hanging over British business as it is hanging over American business."

The European Central Bank's actions to support the currency had bought some breathing space, Sir Mervyn said in an interview with Channel 4 news.

"Now is the time that they have to decide exactly what kind of monetary union they want."

The Governor of the Bank of England, Sir Mervyn King, has insisted there are "a few signs" of recovery in the British economy.

"The last quarter was down, I think the next quarter will probably be up," he said.

"I think we are beginning to see a few signs now of a slow recovery, but it will be a slow recovery, after a banking crisis one can't expect to get back to normal and I fear it will take a long time."

Sir Mervyn cautioned Chancellor George Osborne not to water down the proposals for reform of the UK's banks proposed in Sir John Vickers' review.

And following reports that the Government could miss its target of beginning to see national debt falling by 2015/16, Sir Mervyn said that would be acceptable only if the global economy was growing slowly.

The Governor of the Bank of England, Sir Mervyn King, speaking in his first-ever live television interview to Channel 4 news, said that he did not contribute to Bob Diamond leaving as the boss of Barclays, saying;

"I didn't fire anybody. I had a conversation which I thought would be helpful to them [Barclays] in understanding how concerned the regulators were."

He refused to confirm if he had confidence in Bob Diamond at that time.