Bank of England (BoE) governor Mark Carney has been asked by the government to stay for another year in a move to settle the City’s Brexit concerns, according to a report.
This means Carney would remain BoE governor until June 2020, staying for an extra year on top of his original departure date of June 2019.
The report, in the London Evening Standard’s Diary section, claimed the chief reason would be so Carney could provide continuity following the UK’s exit from the European Union, which takes place on 29 March 2019.
However, a Treasury spokesperson denied the story.
Carney has already extended his term once at the Bank in a move to ensure continuity through the Brexit negotiations.
He had originally only intended to remain for five years after joining in 2013, but announced plans to stay an extra year four months after the Brexit Referendum in June 2016.
BoE deputy governors Ben Broadbent, Dave Ramsden and Jon Cunliffe are among the favourites to replace Carney, along with Financial Conduct Authority CEO Andrew Bailey.
In May, the governor warned economists about the dangers of a “disorderly Brexit”, adding monetary policy could be placed on a different path if the transition is not “smooth”.
In August, the Bank’s Monetary Policy Committee unanimously voted to hike interest rates by 25 basis points to 0.75%, the highest level in almost a decade and its first rise since November 2017.
Silvia Dall’Angelo, senior economist at Hermes Investment Management, commented: “It would be ideal if Carney decided to remain at the helm of the BoE 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.
“Reports he was asked to stay on until 2020 suggest there is broad-based awareness that continuity is needed at such a crucial juncture for the country.
“That said it is unclear whether the rock star governor is willing to accept what looks like an unpalatable offer.
“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.”
Source: Professional Adviser