Alan Greenspan to be knighted

Mr Greenspan can now use KBE after his name

The UK is to award Alan Greenspan, chairman of the US Federal Reserve, an honorary knighthood.

The honour, which was approved by the Queen, is to recognise Mr Greenspan's "contribution to global economic stability", the UK Treasury said.

Mr Greenspan, who makes crucial decisions about raising or cutting US interest rates, will receive the award when he next visits the UK, possibly in the early autumn.

"The award is in recognition of... the benefit that the UK has received from the wisdom and skill," a Treasury spokesman added.

Cryptic messages

Mr Greenspan, sometimes referred to as the most powerful man in the world because of his control over the US economy, is also famous for his ability to keep the markets and the politicians guessing.

Wall Street listens when Mr Greenspan speaks

He once famously said: "If I seem unduly clear to you, you must have misunderstood what I said."

As chairman of the Fed, he is required to go before Congress at least twice a year to give his assessment of the US economic situation.

In his most recent testimony, he told the Senate that the US economy was set to recover despite recent stock market volatility.

"With profitable opportunities for malfeasance markedly diminished, far fewer questionable practices are likely to be initiated in the immediate future," he said.

His accounts of the economy have traditionally been cryptic - and closely watched.

A gift for figures

Mr Greenspan, 76, was born the son of a stockbroker and showed a gift for figures at a early age.

In the 1950s, he left academia to become a professional economist.

During the 1970s he was President Gerald Ford's top economic adviser, and took up chairmanship of the Fed just before the stock market crash of 1987.

His fourth four-year term as Fed chairman ends in 2004, when he is widely expected to retire.

Because Mr Greenspan is not British, he will not be able to call himself Sir Alan, but he will be able to use the letters KBE after his name.