The Treasury has denied reports that it “quietly approached” Bank of England Governor Mark Carney asking him to stay in the role for an extra year after his scheduled departure in June 2019, Reuters reports.
Carney’s tenure as the Bank’s chief is already longer than expected.
When Carney took over the role in 2013, he agreed to stay for five years rather than accepting a usual eight-year term. In the wake of Brexit referendum and the uncertainty that it had inspired, Carney agreed to stay another year – until June 30, 2019.
Earlier today, the Evening Standard reported that by asking Carney to extend his term, the government sought to provide “continuity during the turbulence of Brexit.”
The Evening Standard says it understands the Treasury is finding it hard to find a suitably strong replacement for Carney.
A Treasury spokeswoman denied this, however.
According to Reuters, the most tipped person to replace Carney is the current head of FCA Andrew Bailey.
The Evening Standard says Carney’s extended term would be welcomed by the City, but less so by Brexiteers.
Hermes Investment Management senior economist Silvia Dall’Angelo says the extension for Carney would be positive.
Dall’Angelo says: “It would be ideal if Carney decided to remain at the helm of the Bank of England for longer. It would provide continuity in the approach to monetary policy, shoring up business and consumer sentiment during the Brexit process and potentially allowing for a smoother transition.”
She argues that an offer to prolong the term might not be tempting for Carney himself, however.
Dall’Angelo adds: “It is unclear whether the rock star governor is willing to accept what looks like looks like an unpalatable offer. For a start, he was the one who decided after the Brexit vote to bring forward the end of his term to June 2019 from the [usual] 2021 expiry.
“Moreover, as the chances of a hard Brexit are ‘uncomfortably high’, risks that his otherwise stellar reputation gets smeared in a potentially disruptive process, are also elevated.”