Mark Carney Expected To Leave Bank of England In 2019, Says Downing Street

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Monday, September 03, 2018   1.48PM  /  Downing Street  

 

Bank of England Governor Mark Carney is expected to step down from his role next year, as expected, Prime Minister Theresa May's spokesperson said Monday.

 

Bank of England Governor Mark Carney is expected to step down from his role next year, as expected, Prime Minister Theresa May's spokesperson said Monday, amid multiple media reports that the government is lobbying to extend his term beyond 2019.

 

Carney, who was appointed for a five year term that began in 2013, agreed to extend his time at Threadneedle Street by one year -- to June 2019 -- in order to maintain consistency at the helm of the U.K.'s central bank during the country's transition from the European Union.

 

However, with Britain's exit date marked for March 2019, and with no agreement that will replace the existing trade and economic relationships between London and Brussels, speculation that the government would ask Carney to stay on -- as well as rumours that officials were having difficulty finding a suitable candidate -- have intensified.

 

The pound was marked around 0.3% lower against the U.S. dollar at 1.2963 following the spokesperson's comments, extending a decline that began over the weekend with comments from the EU's chief Brexit negotiator, Michel Barnier, that suggested May's so-called 'Chequers' deal would not be accepted by Brussels.

 

The pound's Monday slide was also accelerated by data showing that manufacturing activity in the U.K. slowed to its weakest pace in more than two years last month as exports plunged and investment stalled amid the ongoing Brexit uncertainty.

 

The pound hit a 14-month low of 1.2706 on August 15 after data showed inflation accelerated for the first time in eight months as investors feared the rising level of consumer prices, set against wage growth of only 2.4%, would be a further headwind to consumer spending in the second half of the year.

 

The pound has fallen around 10.1% against the dollar since its April 2018 high of 1.4337 and 14.1% since the country voted to leave the European Union in June of 2016

 

Questions over Carney's future with the Bank of England, along with his vocal concern for the fate of the U.K. economy after Brexit, are likely to be on display Tuesday in London when he sits down for his regular testimony to U.K. lawmakers on the government's Treasury Select Committee.

 

Carney told the BBC last month that he considered the risk of a so-called 'hard Brexit', in which the U.K. leaves the EU without a bespoke trade deal, to be "uncomfortably high at this point" Carney said in an interview with BBC radio just one day after the Bank raised it base interest rate -- to 0.75% -- for only the second time since the financial crisis.

 

"People will have things to worry about in a no deal Brexit, which is still a relatively unlikely possibility but it is a possibility."

 

That comment captures many of the criticisms lobbed at the former Bank of Canada Governor, who has been dubbed the "unreliable boyfriend" in the British press for taking up rate hikes only to reverse course when economic data has been indecisive. He's also been accused of over-exaggerating the impact of Britain's decision to leave the EU on the domestic economy, with senior Conservatives in May's government attacking him as the 'enemy of Brexit'.


 

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