Mervyn King will continue to serve as governor of the Bank of England, it was confirmed this morning.
The 59-year-old was reappointed by the Queen after Gordon Brown finally affirmed his confidence in the governor.
There had been widespread speculation Mr King's re-appointment hung in the balance as a result of his initial response to last summer's credit crunch.
Mr King was reportedly reluctant to bail out troubled lenders, arguing it was their fault for loosening borrowing requirements.
My King has said he is "honoured" to accept the reappointment as governor of the Bank of England.
In a statement he said: "[I] look forward to working hard with my bank and monetary policy committee colleagues on the economic and financial challenges that face us all."
Mr King's current term expires on June 30th 2008, with his reappointment giving the Bank stability at a time when the economy seems poised to slip into recession.
The chancellor, who was consulted on Mr King's future, has welcomed the move.
Alistair Darling said: "I am delighted that Mervyn King has been appointed as the governor of the Bank of England for a further five-year term.
"He has played a key role in delivering macroeconomic stability in the UK, and his leadership and experience will continue to prove invaluable to the Bank of England."
Mr King, who was formerly a professor at the London School of Economics, was first appointed governor in 2003 after serving five years as deputy governor.