Bank of England's Carney to stay 7 months longer to help Brexit

Lloyd Doyle
September 14, 2018

Britain's finance ministry said on Tuesday that Bank of England Governor Mark Carney had agreed to extend his term until the end of January, 2020.

Carney was previously set to leave his role in June 2019 but has been persuaded to stay on by Chancellor Philip Hammond.

Sir Jon Cunliffe, Deputy Governor of the Bank of England with responsibility for financial stability has also been re-appointed, effective from 1 November.

The United Kingdom will leave the European Union on March 29 but as yet no full exit deal has been agreed and many lawmakers in Prime Minister Theresa May's own party object to her own so-called Chequers proposals.

In his acceptance letter, the Mr Carney wrote: "I recognise that during this critical period, it is important that everyone does everything they can to support a smooth and successful Brexit".

Speaking in parliament, chancellor Hammond said that he wanted to extend Carney's stay in order, "to ensure continuity during what could be quite a turbulent period for our economy in the early summer of 2019".

Should Brexit go smoothly and United Kingdom economic activity pick up steam in 2019 a Carney-led Bank of England would nearly certainly accelerate the pace of interest rate rises as per recent guidance.

The governor and Prime Minister have clashed in the past with May commenting in 2016 on how there would be "bad side effects" for Carney's monetary policy and Carney taking a negative view on the future of Brexit.

Moments after signalling he would stay during a Treasury committee last week, the Governor risked angering Brexiteers further with a new warning a no deal Brexit will squeeze household budgets.

'They used to throw brick bats at Mark Carney about Project Fear but now it's Project Near'.

The extension isn't the first of Carney's tenure at Threadneedle Street.

He was seen as a key source of stability in the political power vacuum that followed the Brexit vote, with one former policy maker calling him the "only adult in the room" for his pledge to support the financial system in the immediate aftermath.

'You can't avoid that medium-term impact on real incomes, ' he added.

However, earlier this year Chancellor Philip Hammond said he might look overseas again for a successor to Carney.

Other reports by Iphone Fresh

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