Mark Carney to face MPs' questions over future at Bank of England

Mark Carney

Mark Carney will face questions from MPs over his future at the Bank of England on Tuesday amid mounting speculation he could extend his stay as governor in order to guide the British economy through Brexit.

Carney is expected to answer questions on Tuesday afternoon over his future when facing MPs on the House of Commons Treasury committee, which is tasked with scrutinising appointments at the central bank. Several members of the committee have told the Guardian thatkeeping the governor – who is due to leave in June next year – would help smooth Britain’s departure from the EU on 29 March.

Although the meeting is scheduled to discuss the Bank raising interest rates last month, Stewart Hosie, a Scottish National party MP on the committee, said: “It wouldn’t be a surprise at all if a member would ask [about Carney’s future].”

“Carney has done a very good job in what, in many cases, have been very difficult economic circumstances. There would be a lot of merit in the chancellor asking him to extend his term should that be the decision the chancellor were to take,” he added.

However, Downing Street played down reports on Monday, suggesting Carney could stay until 2020, saying it was still the plan for him to leave in 2019 after six years in charge at the central bank.

Speaking to reporters after the BBC said the Treasury was in talks with Carney over extending his contract, Theresa May’s spokesman said: “He has said he is stepping down in June 2019. The Treasury have said we’ll start recruiting for a new governor. And that is the plan.”

Asked if Carney had done a good job at Threadneedle Street and should therefore be kept for longer than planned, the spokesman added: “The prime minister thinks the governor has done a good job.” The Queen appoints the Bank of England governor, but on the recommendation of the prime minister and the Treasury, which will lead the recruitment process under Philip Hammond.

Carney has also attracted the ire of leading Brexiters, including Jacob Rees-Mogg, for his repeated warnings over the economic consequences of Brexit. Carney has said the chance of a no-deal Brexit is uncomfortably high and would be highly undesirable.

Rees-Mogg, who has been a staunch critic of the governor, told the Guardianlast week the Treasury should not extend his tenure. “Carney refused [an eight-year term as governor], accepting a shorter one, which was then extended. To change it again would be ridiculous,” he said.

Investors in the City of London have however responded favourably to the idea of the governor remaining in his post, arguing it would help remove an additional layer of uncertainty about Britain’s economic policy after leaving the EU. They have also praised Carney’s ability to calm financial markets, which could be rocked by the UK crashing out without a deal.

Colin Jackson, an analyst at the stockbroker Goodbody, said extending his term would be welcome. “It removes an element of uncertainty over the effectiveness of the Bank of England to implement appropriate policy in a post-Brexit world, while it would also reduce the headache faced by the Treasury as it fights for a soft Brexit within the UK government,” he said.

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Speculation over Carney’s future first arose after a report in the diary pages of the London Evening Standard last week, suggesting the Treasury was struggling to find an appropriate replacement and had asked him to stay. Officials said last week they “did not recognise the reporting” by the newspaper.

Although the diary pages are usually reserved for gossip from around London and Westminster, the newspaper is edited by the former chancellor, George Osborne, who was responsible for hiring Carney in November 2012.

The Bank of England declined to comment. A spokeswoman for the Treasury said: “There is no update from us on governor recruitment plans, we will announce details in due course.”

Powered by article was written by Richard Partington Economics correspondent, for The Guardian on Monday 3rd September 2018 14.11 Europe/London © Guardian News and Media Limited 2010


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