Mark Carney is set to stay on Governor of the Bank of England beyond his initial five year term, according to the Financial Times. He has announced he will stay until 2019, adding a year to his five year term.
This is good news. Not because Carney’s approach is flawless or beyond criticism (it is not). But during what will be a difficult period, during tricky negotiations with the EU, and with those in the markets already struggling to read politics reliably, losing a Governor of the Bank of England early – in 2018 – would send a dreadful signal.
The report by the FT is carefully couched. Carney is set to stay, but will seek reassurances from Theresa May. Presumably about Bank independence and the need for clear line of communication between Number 10, the Treasury and the BOE. He expects to make a statement this week aimed at ending uncertainty.
There’s a degree of wrong on both sides here. Carney does not like criticism much and that has made him sometimes too thin-skinned in the face of dafter provocations from MPs and even when he is asked legitimate questions about policy. It’s British politics, and it’s a rough old trade. The aggro now is as nothing to the wars involving the BoE in the 1970s and 1980s. Yes, of course, that was pre-independence for the Bank. Even so, chill.
On the other side, some Brexiteers flush with victory seem to have forgotten that undermining a Governor of the Bank of England is the markets equivalent of playing with matches in a petrol station. They’re loudly unhappy with the Chancellor of the Exchequer too. This combo – trashing the Governor of the BoE and the Chancellor simultaneously – is completely and utterly nuts. If this carries on May will have to start firing people.
The situation got so out of hand that what can only have been a (poor) joke in a recent column suggesting Jacob Rees-Mogg as successor to Carney was recycled as a serious runner. It is not. Really, it is not.
We’re in ravens at the Tower of London territory here with Carney and Hammond. What they symbolise via the authority of their respective offices is stability, relative calm and continuity. Perception and confidence matters, a lot. Tories used to have a better feel for the realities of markets, back when many of them had worked in the City. Now, they seem to think a war on Carney is simply an extension of the Brexit campaign. It is to his credit if he has decided to leave this recent mess in the past and get on with helping guide Britain through Brexit.
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