Governor's bleak jobs warning

Sir Edward George is visiting Wales

The governor of the Bank of England has indicated that the general economic slowdown may soon lead to rising unemployment in Wales.

Sir Edward George was in Cardiff for a historic meeting of the bank's ruling body in the capita.

He said the effects of the 11 September terrorist attacks in the US was feeding through into the world economy, and the recovery expected in the UK would now be next year instead of this.

Although we have sought to offset the problem and isolate ourselves from it ...we cannot get to the core because the causes have been internationa

Sir Edward George

"I have to say that we are possibly at a turning point," said Sir Edward.

"Although we have sought to offset the problem and isolate ourselves from it ... we cannot get to the core because the causes have been international."

Wales has been hit by a series of major job losses in the past year, including the retraction in the steel industry.

Around 22,000 jobs have gone in Welsh manufacturing with the most recent losses announced at GE aeroplane engine plant at Nantgarw near Caerphilly, which is shedding 300 staff.

So far, a resilient services sector has prevented that figure translating into higher overall unemployment, which presently stands at a 25-year low.

"Wales has lower unemployment figures than they have been since 1975," said Sir Eddie, ahead of the latest figures which are due to be released on Wednesday.

"However, I have got every sympathy with the problems suffered by manufacturing."

The steel industry has been at the heart of job losses

In a speech to business leaders in Swansea on Tuesday, the Bank of England governor predicted that the economy would avoid a full scale recession, although it did face a "bumpy ride" for some time to come.

He said the Bank's Monetary Policy Committee, which has already cut interest rates six times this year - including two cuts since September 11 - would be closely monitoring the economic data to see if further action was needed.

The Bank of England's ruling body is meeting in Cardiff on Wednesday for the first time since it was founded 308 years ago.

"I cannot think why we have not taken our meetings round the UK sooner, but better late than never," said Sir Edward.

In his keynote address, however, First Minister Rhodri Morgan warned of the dangers of talking Wales into a recession.

He said the country had a stable foundation for economic development despite, despite threats to industries including the aerospace sector.