The prime minister said she would support the Canadian if he decided to put back his departure date from Threadneedle Street until 2021 and praised his efforts to steer the UK economy through the post-Brexit vote period.
May’s spokeswoman said: “The PM has been clear in her support for the governor, the work he is doing for the country. It is clearly a decision for him, but the PM would certainly be supportive of him going on beyond his five years.”
May and Carney were scheduled to have a meeting later on Monday, but the warm tone adopted by the prime minister’s spokeswoman immediately prompted rumours that the governor could be about to announce his future plans.
“The PM has always had a good working relationship with the governor of the Bank of England and intends to continue that,” the spokeswoman said.
Asked if May considered Carney to be the best man for the job, the spokeswoman said: “Absolutely.”
Carney has said he will make a decision before the end of the year, but concluded that he needs to put the matter to rest before then. His next public appearance will be at a press conference on Thursday to mark the publication of the Bank’s first quarterly inflation report since it cut interest rates to a record low of 0.25% in August.
May fuelled speculation of a rift between Downing Street and the Bank when she used her speech at the Conservative party conference to criticise the side-effects of ultra-low interest rates and money creation under the quantitative easing programme.
No 10 quickly apologised to Carney for the remarks, insisting that they had not been intended as a sign of a lack of confidence. But the speech was followed by strong attacks from senior Conservatives, including William Hague and Michael Gove, on the Bank’s conduct of monetary policy.
Carney became the Bank’s governor in July 2013 and said at the time that he would only serve for five years. For some time, he has been weighing up whether to stick to his original decision or remain at Threadneedle Street until 2021.
Philip Hammond has already said he would welcome Carney serving a full eight-year term. The chancellor believes that the departure of the governor would create needless instability at a time when the pound has been under downward pressure on foreign exchanges.
This article was written by Larry Elliott, for theguardian.com on Monday 31st October 2016 13.05 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010