Mark Carney 'could be persuaded' to stay if Brexit talks stall

'Rock star of finance' has sparked ire of senior Conservatives but is 'best person for the job', says source

Governor of the Bank of England Mark Carney
(Image credit: Anthony Devlin - WPA Pool/Getty )

Bank of England governor Mark Carney surprised many by announcing he would extend his time as governor of the Bank of England until the end of June 2019 but no further.

The "rock star of finance" revealed on Monday he would stay for only one more year than the five he had initially set out when he joined the bank in 2013.

"The City was desperate for the governor to stay to 2021," says Tim Wallace in the Daily Telegraph.

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Instead, his appointment will end in June 2019, which, the paper notes, is "just months after Brexit's due date".

Wallace adds: "Like the best showmen, Mr Carney has left his fans wanting more. We should hope he can pull off his plans for the economy with just as much finesse, particularly on the tight deadline he has now set himself."

While markets were buoyed by the news – the pound hit a two-week high – many are worried Carney will depart at what could prove to be a difficult time if there is a hard Brexit.

Others are concerned that negotiations won't have concluded by then. They fear there will be an extension to the Article 50 timetable or – worse – an ultra-hard exit followed by ongoing talks that will lead to ongoing uncertainty.

Should that happen, senior Whitehall sources have told the Telegraph they think "Carney could still be persuaded to remain in post".

The paper continues: "Carney is said to have decided to leave in 2019 for family reasons. His wife and children will leave London in 2018 and government sources said he made a 'commitment' to them that he would return to Canada."

Chancellor Philip Hammond lobbied the governor to stay on until the end of the full eight-year term. Sources reckon he could reverse his decision if the Brexit process goes awry.

"He is the best person for the job," a source said. "He has taken a very personal decision to return to Canada because of his commitment to his family. But it is not impossible he could revisit his decision.

"If things are looking particularly bad in early 2019, the Treasury may just be able to convince [Carney] to stay and ensure that there is some stability in the lead-up to Brexit."

Pound spikes as Carney pledges to stay until Brexit

1 November

Mark Carney has announced he intends to stay on as governor of the Bank of England for an extra year before stepping down from his position in mid-2019.

"It means he will serve one year more than the five he had committed to," says the BBC, "but will still be two short of the usual eight years governors serve."

He will also be in position until after the UK's expected Brexit from the European Union, providing monetary policy continuity during a period of economy uncertainty.

Markets reacted positively to the news, with sterling hitting a two-week high of $1.277 against the dollar in early morning trading, although it has since retreated slightly after weak manufacturing sector data, says the Daily Telegraph.

Carney had originally indicated in 2012 that he would leave the post early due to "personal, family considerations". Specifically, he said his family would move back to his native Canada.

But writing to Chancellor Philip Hammond, he said he "recognised the importance to the country of continuity" during the Brexit process. "My personal circumstances have not changed but other circumstances clearly have," he added.

The announcement ends weeks of intense speculation, but has also raised questions among senior finance officials, the BBC says.

Treasury select committee chairman Andrew Tyrie said Carney's decision to serve six years "requires a good deal of examination and explanation" and has indicated that he plans to question the governor over his plan at a committee meeting in two weeks.

Carney had come under pressure to quit from a number of pro-Brexit politicians, such as Michael Gove, over claims he was biased in the lead up to the EU referendum.

But writing in the Telegraph, Leave supporter Allister Heath says the "compromise" is the "best solution" and will prevent further market "misunderstanding" of Brexit.

"The UK is not conducting its global PR very well at the moment, and has been insufficiently forceful and clear about its desire not merely to remain open but in fact to embrace free trade even more enthusiastically," he writes.

"Losing Carney too soon would thus have been interpreted very badly overseas. It would also have felt vindictive: an unnecessary witch hunt against a Remainer."

Mark Carney: Will he stay or will he go?

25 October

"Is there a conspiracy to unsettle Mark Carney?" asks The Guardian's Nils Pratley.

Last week The Bank of England governor made "sharp remarks about how he wasn't going to 'take instruction' from politicians".

This, says Pratley, seemed to be in response to "Theresa May's grumble at the Tory party conference about the 'bad side-effects' of ultra-low interest rates and quantitative easing".

Other Conservative heavyweights have had the knives out for him, too, including former foreign secretary and party grandee Lord Hague, and ex-justice secretary Michael Gove.

In an article for the Telegraph, Hague warned that if central banks do not reverse "policies that are becoming steadily more unpopular and counter-productive" then their "independence will come, possibly quite dramatically, to its end".

Writing in The Times Gove criticised monetary policy groupthink, saying Carney's "attitudes and prejudices reflect a career in Goldman Sachs and the biases current among central bankers".

James Bartholomew goes further in the right-leaning magazine The Spectator, criticising Carney over his twice-abandoned policy of "forward guidance" and his economic warnings surrounding Brexit.

Carney will decide at the end of this year whether to extend his five-year appointment. "He should not be allowed to. He has got too much wrong. He has been too political. He did not like the referendum result and now is trying to continue the argument," says Bartholomew.

But among wider markets, Carney remains popular – and the Bank of England's action immediately after the Brexit vote was well received by markets, says Pratley.

"Whether Downing Street likes it or not, international investors regard Carney as a grownup in the room at a time of upheaval", Pratley adds, so May should "quell the noise and lobby Carney to stay".

City AM's Tracey Bowles agrees. "His presence at the Bank may be infuriating die-hard Brexiteers but he represents continuity and stability at a time of profound policy upheaval. The country can ill afford to lose its central banker at such a time."

Whatever Carney decides, he will not do so before the Bank reveals its latest decision on rates next Thursday. Given the improvements in recent economic data, he is expected to appease his Tory critics for now by keeping rates on hold.

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