The government has announced that governor Mark Carney will remain at his post until January 2020 in order to guide the bank through Britain’s exit from the EU
Chancellor Philip Hammond has requested that Carney extend his term as governor of the Bank of England, and HM Treasury has also announced that Jon Cunliffe has been reappointed for a second five-year term as deputy governor for financial stability.
In letters published on 11 September 2018, the Chancellor formally requested that Carney remain in his post for a further seven months in order to ‘ensure there is continuity at the Bank’ during what he described as an ‘exceptional period’ and help to ‘support a smooth exit of the United Kingdom from the European Union and an effective transition to the next Governor.’
Carney replied that he deeply appreciated the support of the Chancellor and the Prime Minister and said: ‘I recognise that during this critical period, it is important that everyone does everything they can to support a smooth and successful Brexit. Accordingly, I am willing to do whatever I can in order to promote both a successful Brexit and an effective transition at the Bank of England and I can confirm that I would be honoured to extend my term to January 2020.’
Carney replaced Mervyn King in 2013 under a five-year term with the option for a further three years. He began his career at Goldman Sachs before joining the Canadian government, serving as the Governor of the Bank of Canada from 2008 until 2013. He made international headlines when, one month into his appointment, he cut the overnight rate by 50 basis points in March 2008 and predicted that the sub-prime mortgage crisis would proliferate globally. That the Canadian economy outperformed those of its G7 peers during the financial crisis, and was the first of the G7 countries to see its GDP and employment recover to pre-crisis level, was ascribed by many observers to the fiscal policies he implemented.
The Chancellor has confirmed in a letter to Nicky Morgan MP, chair of the treasury committee, that Mark Carney will extend his term. In a public comment, Morgan said:
'This announcement provides much-needed stability and clarity during this important period. The Government should now use the extra seven months to continue its succession planning. It should identify a candidate in good time for the Treasury Committee to scrutinise the appointment.'
Report by James Bunney