Bank of England Governor Mark Carney will stay at the central bank an extra seven months until the end of January, 2020, to help smooth Britain’s departure from the European Union next year, Chancellor of the Exchequer Philip Hammond told Parliament on Tuesday.
Mr. Carney had been due to step down at the end of June, 2019 – having extended his term by a year already to cover the immediate months after Brexit – but last week he told legislators he would be willing to stay longer if requested.
British media had previously reported the Finance Ministry was keen for Mr. Carney to extend his stay and was having difficulty finding a suitable successor.
“I am willing to do whatever I can in order to promote both a successful Brexit and an effective transition at the Bank of England and I can confirm that I would be honoured to extend my term to January 2020,” Mr. Carney wrote in a letter to Mr. Hammond.
Before Mr. Carney joined the Bank of England in July, 2013, he said he only wished to serve five years of the standard eight-year term for a Governor to minimize his children’s time away from their native Canada.
Mr. Hammond said Mr. Carney would provide “vital stability” for Britain’s economy during the Brexit transition, and the extension was also welcomed by Nicky Morgan, the chair of the parliamentary committee that monitors the central bank and Finance Ministry.
Deputy Governor Jon Cunliffe would serve a second five-year term until October, 2023, Mr. Hammond added.
Mr. Carney focused heavily on minimizing financial market turmoil in the run-up to 2016’s European Union referendum, and has warned since of the costs of a disorderly break, drawing fire from Brexit supporters.
Nigel Farage, former leader of the pro-Brexit United Kingdom Independence Party, said the reappointment was “truly appalling.”
But financial market economists broadly welcomed the extension for Mr. Carney, who early during his period of office gained the moniker of an “unreliable boyfriend” owing to mixed signals about the future path of interest rates.
Last November, the Bank of England raised rates for the first time in more than a decade and increased them again last month, when Mr. Carney said that market expectations of a further rate rise a year for the next few years would be a reasonable rule of thumb.
“It would have been preferable to have avoided a piecemeal extension to his term at the Bank. But bearing in mind the uncertainties in the economy, I think it’s a good thing he’s staying,” Investec economist Philip Shaw said.