Saturday, June 25, 2022

Bank of England chief Carney extends post-Brexit stay


LONDON: Mark Carney will remain Bank of England chief until January 2020 to steer the UK economy through possibly “quite a turbulent period” post-Brexit, finance minister Philip Hammond announced Tuesday.

Speaking in parliament, Hammond said BoE governor Carney had agreed to prolong his stay by seven months “in order to ensure continuity through what could be quite a turbulent period for our economy in the early summer of 2019”.

Britain is set to leave the European Union in March.

Chancellor of the Exchequer Hammond added in a statement that he was “delighted that the governor has agreed to stay in his role for a further seven months to support a smooth exit from the European Union and provide vital stability for our economy”.

In a letter to Hammond, Carney said he recognised “that during this critical period, it is important that everyone does everything they can to support a smooth and successful Brexit”.

Carney added: “Accordingly, 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.”

Read More: EU warns Irish border issue could still sink Brexit deal

Carney last week confirmed he had held talks to extend his tenure, while Hammond on Tuesday said staying in his post for a few months longer would allow for “an effective transition to the next governor”.

The Canadian national began his governor role in 2013, stressing his intention at the time to serve only five years of an eight-year term for personal reasons, meaning he would step down in 2018.

However in October 2016, Carney agreed to remain at the helm for one more year amid Brexit negotiations between London and Brussels.

 Brexit deal hope

There are concerns about possible economic chaos for the UK should Britain depart the European Union without a divorce deal.

But speaking Monday, EU Brexit negotiator Michel Barnier said it was “realistic” to expect an agreement with London within the next eight weeks, striking an optimistic note as the clock ticks down to the UK’s departure.

The pound rose on Barnier’s comments and held onto most of its gains amid Carney’s announcement.

Carney, who succeeded Mervyn King as BoE governor to become the first non-Briton to hold the post, last month oversaw only the second UK interest-rate hike since the global financial crisis a decade ago.

The Bank of England in August voted to lift borrowing costs by a quarter-point to 0.75 percent to help tame high British inflation caused in part by falls in the pound hiking the cost of imports.

Before moving to London, Carney served as governor of the Bank of Canada, where he won praise for guiding the country through the global financial crisis relatively unscathed.

Ahead of his career as a central banker, Carney had previously worked for 13 years at US banking giant Goldman Sachs.


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