The Governor of the Bank of England said he was struck by the "self-confidence" of Bradford's business community as he concluded a two-day visit to the city.

Mervyn King said he was "very positive" for the future of the region and believed it was capable of turning around its fortunes after coming to terms with the structural changes of recent years.

Mr King, who visited several businesses as well as Salts Mill and Bradford University School of Management, said it was too simple to talk of a contrast in fortunes between distinct sectors of the economy, such as manufacturing and services.

"There is an enormous variety of areas in which businesses are being successful whereas there is often a tendency to say areas like manufacturing are doing badly while the new technology industries are doing well," he told the Telegraph & Argus.

"There is clearly success across a wide area and there is also a good degree of self confidence. There is a feeling that, although there will always be difficulties created by the world economy, the success of the area is in the hands of the Bradford business community."

He added: "I have been struck by the number of people who talk about Bradford specifically. They have started their businesses here and they identify very strongly with Bradford's economic fortunes."

Mr King, who chairs the Monetary Policy Committee which sets interest rates, said Bradford had a tremendous industrial heritage which was reflected in its environment and architecture, notably its historic mills.

"There are lots of advantages of this environment and these are now being turned into positive symbols - these are not just relics; they are being turned into thriving institutions," he said.

In the wake of repeated calls by some local manufacturers for a cut in interest rates to help shore up their economic recovery, Mr King insisted he did take their views into account.

But he said: "We can't just single out manufacturing, for example; there are other types of businesses exporting, such as the School of Management. But we do care about them and one of the reasons we make these visits every month is so that I can see for myself the problems that people face."

On consumer spending, Mr King said there was little sign of any regional variation in the downturn in fortunes in the High Street.

"There has been a consumer downturn and I don't sense that Bradford is any different from that," he said. "There has been a slowing of consumer spending over the last two years relative to the heady days of growth rates of four per cent that we saw from 1997 to 2002. But over the last six months there has been a sharper slowdown."

He added: "It remains to be seen whether this becomes more protracted when it might, for example, start to have an impact on services, or whether there will be some moderation over the next few months."

But Mr King insisted neither he nor his fellow MPC members had "any idea" which way interest rates would move next after last week's decision to keep them unchanged at 4.75 per cent. He said the decision was reviewed afresh each month and would be determined by the economic data and the feedback received during his trips around the country.

However, Mr King - who on Monday night at Salts Mill spoke of the existence of inflationary pressures in wages, the money supply and import prices - did indicate he felt there had been some over-reaction in the media to the scale of the slowdown, particularly in the wake of individual companies reporting poor results.

"Clearly, there has been a slowdown in the High Street," he said. "But sometimes the headlines do tend to over-react to the significance of any one event."