THE future Governor of the Bank of England has denounced the interest rate-rigging at the Royal Bank of Scotland and signalled a review of UK economic policy.

Mark Carney said: "The behaviour that's been exhibited this week, confirmed this week, is reprehensible and should be prosecuted to the full extent of the law."

Mr Carney was appearing before the House of Commons Treasury Committee 24 hours after the Edinburgh-based banking giant was handed a £391 million fine for its part in the Libor scandal.

The incoming Governor also responded to growing calls for the Government to do more to help spur on growth, signalling a potential shake-up of the Bank's key 2% inflation remit.

He has already hinted it might be better to target growth and the size of the economy rather than the rate of inflation.

Mr Carney, 47, currently the Governor of the Bank of Canada, is the first foreigner to be appointed to the Bank's top job in its 319-year history

He takes up his post in July, and will receive an £800,000-plus annual pay and perks package.