WORKERS at Royal Worcester Porcelain had a chance to quiz the deputy governor of the Bank of England.

Mervyn King, who is in charge of monetary policy, visited the factory yesterday during a day in the county which gave him the chance to speak directly to businesses.

"We try to visit all over the UK in a bid for people to understand why low inflation is important as it gives business confidence, which encourages investment and, in turn, creates a stable economy," he said.

"Manufacturing has clearly suffered difficulties during the last few years, particularly with exports to Europe and the United States," said Mr King who also addressed members of Hereford and Worcester Chamber of Commerce.

"But things are looking up a bit and a recovery is under way. We have to get a balance between supply and demand and keep inflation low and stable. Our objective is to try to avoid some of the mistakes of the past."

As first-time buyers struggle to buy properties in Worcester, Mr King said the interest rates would be looked at "one month at a time".

He explained how visits like yesterday's helped the bank's monetary policy committee make economic decisions.

"We liaise with our 12 regional agents, which includes John Bartlett, from the West Midlands, and meet at the beginning of each month to set interest rates," he said.

"You can never tell what is going to happen this time next year - we have expectations, but we can't anticipate what it's going to be.

"Next month we will have new data and a new picture of the economy to study and will have to respond to that."

Mr King would not be drawn on how long the Bank of England would be circulating pound notes in preference to the Euro as this was a "political decision".

"I'm delighted Worcester's Sir Edward Elgar is still on the back of the £20 and we have no intention of removing him," he added.