PROFILE: Howard Davies; Howard's Way to the Bank

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HOWARD DAVIES is miffed. To the best of his knowledge, the Downing Street vetting machine has not been checking up on his extra-marital activities - or lack of them.

"I don't like the implications of that, if they really haven't been asking around," he said with a poker face.

The new deputy governor of the Bank of England, appointed last week to replace the maritally errant Rupert Pennant-Rea, cannot resist gently making fun of his predecessor's embarrassment. But he chan- ges gear smoothly to report that he seriously intends to get in touch with Pennant-Rea to discuss management topics at the Bank.

Throughout his high-flying career, Davies - who is 44 but at first sight looks 60 because of his bald pate and white hair - has displayed a powerful combination of irreverence and razor-sharpness that a succession of top- drawer potential employers have found attractive. Awareness of his own ability and the natural independence that many only children acquire have also given him a self-confidence reaching well beyond his years.

The son of a Manchester pub estate manager who qualified as an architect at evening classes, Davies soared through the education system, going from Manchester Grammar School by scholarship to Merton College, Oxford, where he achieved what he is careful to describe as a "perfectly respectable" second-class degree in history and French. "I was the first Merton history scholar in a long time not to get a first," he recalled, "but then I was doing French as well." He was also pursuing an energetic university career in acting and journalism, editing the student newspaper, Cherwell, with the current editor of the Times, whom he still refers to chummily as "Pete" Stothard.

Despite Davies's lack of a first, by the time his class of degree was known he had already talked his way into a job with the Foreign Office. "I thought of going into journalism," he said, "but I applied to the FO, along with Shell, Mitsui and what was then the British Overseas Airways Corporation, because I thought they would give me the chance to travel, in the way one does. The FO job came up early, and it was the sort of offer you mentioned in the Junior Common Room."

But he soon found that the diplomatic life was not for him. Although he stayed for two years, he decided he had had enough after three months at the Paris embassy negotiating with the Department of Protocol at the Quai d'Orsay about how many motorbikes should escort the British foreign secretary's car from the airport. "It wasn't fair," he said. "My counterpart at the Dutch embassy had some policy responsibility - I was just concerned with protocol."

Davies fancied a shot at management and lined himself up a place at London Business School. But the Civil Service decided he was too valuable to lose, so he was transferred to what he found was the more congenial atmosphere of the Treasury.

That proved to be a smarter move than he could ever have guessed. He came into regular contact with a middle-ranking Bank of England executive called Edward George.

However, Davies decided that - for the time being at least - the Civil Service was not for him. "I didn't think I was quite suited to going into the same building every day until I was in my sixties," he said.

So he undertook that delayed business course - at Stanford, California - before joining McKinsey, the prestigious US management consultants. There Davies found himself working for Archie Norman, now chief executive of Asda, the supermarket group, on a study for Benson & Hedges, the cigarette maker. …